JOHN KEELLS HOLDINGS PLC – SUSTAINABILITY 2010/11 REPORT THE INSIDE STORY
JOHN KEELLS HOLDINGS PLC www.keells.com Sustainability Report 2010/11 The cover of this report was made with the seaweeds from the Venice Lagoons & Forest Stewardship Counsel (FSC) Certified Fibres. The type of power used to manufacture this cover is Energia Pura, which is electrical energy covered by Renewable Energy Certificate Systems (RECS) Certificates. THE INSIDE STORY The John Keells Group is strongly committed to the seamless integration of sustainability throughout our value chain in each industry group. We have based our approach on the triple bottom line of economic, environmental and social performance and we conduct our operations in a manner that intersects advantageously with the environment and with people.
This report takes a closer look at our sustainability activities for the year under review - offering a detailed summary of our commitment to excellence and sustainability throughout our operations - a commitment inherent in our DNA and part of our every activity, that defines us and sets the standard for all that we do.
Our commitment is described in detail in this report, which shows our performance as measured against the Global Reporting Initiative (GRI-G3) benchmark. John Keells is also a member of the United Nations Global Compact (UNGC). TABLE OF CONTENTS
How to read the report 3 Chairman’s Message 4 Profile: What makes us the John Keells Group 6 Sustainability Policy and Framework 14 Corporate Governance 16 About the Report 28 Sustainability Performance - 3 Year Summary 39
Economic Performance 44 Environmental Impact 48 More than just a Workplace 62 Ethical Business 68 Health and Safety 72 Our Contribution 76 Product Stewardship 104
Performance on Agenda 2010/11 108 Agenda 2011/12 112 GRI Index 113 Report Application Level 127 Assurance Statement 128 Annexes 130 More than just a Workplace
Environmental Impact
Economic Performance
Product Stewardship
Our Contribution
Health and Safety
Ethical Business
HOW TO READ THE REPORT
The John Keells Holdings Sustainability Report is a reflection of progress of our performance as a sustainable organisation. This year’s report continues our sustainability story by providing information on our economic performance, environmental impact, people engagement and societal commitments for the financial year ending 31st March 2011.
The John Keells Sustainability Report is prepared in accordance with the Global Reporting Initiative (GRI-G3) framework, an internationally recognised framework for sustainability reporting. Readers may utilize the GRI Content Index on page 113 as a reference tool to access specific performance information and disclosures required by the GRI framework.
The John Keells Group has been a participant of the United Nations Global Compact (UNGC) Initiative since 2002. This report, which serves as a Communication on Progress, also reinforces the Group’s commitment to implement the 10 principles recognized by the UNGC Initiative. Information on the group’s financial performance for the same period is found in the John Keells Holdings PLC Annual Report 2010/2011. CHAIRMAN’S MESSAGE “The John Keells Group fully appreciates, and has embraced sustainability as being intrinsically interwoven with what we do and hence is now in the DNA of our business processes. I am pleased to report that its benefits, tangible and intangible, can now be felt across the Group.”
Dear Stakeholders, The status of our performance for the last financial year against our goals for energy consumption, environment and conservation, labour Sustainability is fast becoming the backbone of the future of all and human relations are highlighted on page 108. It is encouraging modern corporates. The direct connection between economic growth to note that the Group has been successful in achieving most of its and the safeguarding of triple bottom line priorities is becoming goals and targets for the reporting year. Our agenda for the year more emphasised with each passing day. With sustainability 2011/12 detailed on page 112 emphasizes the Group’s focus on carving its own niche in the bigger picture of the business world, all continuous improvement in all environmental, societal and economic stakeholders - be it investors, customers, suppliers or employees - aspects and will result in the evolvement of best practices across all are now increasingly becoming aware of the importance of seamless of our businesses. integration of sustainability into all aspects of business. The John Keells Group fully appreciates, and has embraced sustainability as Stakeholder engagement always being a priority, the Group held the being intrinsically interwoven with what we do and hence is now in Great Places to Work (GPTW) employee survey in the last quarter this the DNA of our business processes. I am pleased to report that its year, measuring strengths and development areas of the organisation benefits, tangible and intangible, can now be felt across the Group. based on five dimensions: Credibility, Respect, Fairness, Pride and Camaraderie. Focus group discussions with the staff were also held Last year we committed ourselves to upholding and integrating by our external consultants to ensure that the management clearly sustainability into the value chain of all sectors in the Group by understands the root causes of the concern areas emanating from focussing not just on our financials, but also on our economic, the results. The results and findings have been shared with all staff environmental and social performance. This year, we have taken our members and action plans are currently being formulated to address sustainability process one step further, by decentralising the process concern areas. Communication tools such as Young Fora, the to all our business units in order to closely link the Group’s strategic Group’s social forum “JKConnect” and the newly launched Group and operational objectives. The main focus was to integrate the knowledge sharing portal “SEEK” (Sharing Expediency Expertise and objectives of sustainability with those of the businesses and ensure Knowledge) are channels which further facilitate regular employee they are practiced across the Group. The key change was that the dialogue and engagement. With 2011 being the “Year of Innovation” sustainability goals and targets deliverable were determined by the at the John Keells Group, Innovation teams have been put in place individual business units, thereby facilitating their integration not only to encourage employees to think out-of-the-box and in turn entrench as an operational guideline but also as a performance target in their a culture of innovation in all our businesses, support functions and businesses. strategic business units.
This decentralisation process has been a very useful and extremely As a conscientious employer and corporate citizen, the Group’s HIV valuable exercise as it has made the businesses look very closely at and AIDS Workplace Programme and Policy was rolled out across its operations and practices and understand their impacts. During the Group to help protect the lives and livelihoods of our staff, while the reporting year we have been successful in establishing the goals the Group’s HIV and AIDS Awareness Campaign continues to and targets as well as action plans in the environment, labour and educate the public at large. human relations categories. These goals and targets are monitored closely and reported against the performance of the businesses. John Keells continues to develop, support and educate communities We will make this process continuous and an integral part of our in which it operates through its numerous CSR initiatives spearheaded business practices in the review of all our operations and our by the John Keells Foundation. While these projects cover the areas stakeholder touch points. of Education, Health, Environment, Community and Livelihood
4 John Keells Holdings PLC – Sustainability Report 2010/11 Development, Disaster Relief, Sustainable Sourcing and Arts and Culture, the Group also focuses on the continuous improvement of livelihoods of our business partners. Our Leisure Inbound sector’s procurement of transport providers and the scheme of financial assistance provided to them, the sourcing of local produce by our supermarkets and the backward integration to partner our key suppliers such as vanilla and ginger out-growers as well pork and chicken suppliers, by our Food and Beverage sector, are some examples of how the Group’s CSR initiatives are integrated into our Sustainability framework.
Last year’s John Keells Sustainability Report became Sri Lanka’s first to receive a ‘GRI Application Level Check’ and it emerged as the winner of the ACCA and ICASL Sustainability Reporting Awards for its content and coherence. Similar to last year, the Group’s Sustainability Report this year is compiled at a GRI disclosure Level B(+), achieved a GRI Application Level Check and has been assured by a third party. The John Keells Group continues to be a participant of the United Nations Global Compact Initiative, focussing on UNGC’s principles of Human Rights, Labour, Environment and Anti-corruption, which further emphasises the Group’s commitment to the integration of sustainability into all our businesses. Supporting the country’s commitment in achieving the Millennium Development Goals too, is yet another priority of the Group.
In a socio-political scenario devoid of conflict, and enjoying the multi- dimensional possibilities of freedom, Sri Lanka is now positioned for a voyage of unbounded development. Whilst capitalising on this opportunity, John Keells fully understands that new opportunities also bring about new challenges. Committed to safeguarding its multitude of stakeholders from these challenges, we have focused on employee retention and equipping our employees to meet these challenges, considering impacts on communities in all business expansion ventures, responsible marketing and communication and on ensuring conservation and energy efficiency in expanding our plants, among many others. The Group has also taken into consideration the macroeconomic and political trends, within which it functions at present, and these have been included in our sustainability priorities. These aspects have been focused on in our sustainability agenda for the current year.
We firmly believe that this is the country’s best opportunity to make use of the hard won peace in achieving positive economic development for the future. We also believe that good governance, accountability and sustainable business practices are paramount to achieving these goals. The John Keells Group is well poised not only to be a leader in the private sector in this endeavour, but more importantly to do so responsibly, weighing the interests of all our stakeholders.
Yours sincerely,
Susantha Ratnayake Chairman
John Keells Holdings PLC – Sustainability Report 2010/11 5 WHAT MAKES US THE JOHN KEELLS GROUP be listed overseas with Global Depository Receipts (GDR) issued on The John Keells Group founded in 1870, has withstood the test of the Luxemburg Stock Exchange, time by reinventing, realigning and repositioning itself over the years. Originated as a produce and exchange broking business, started The holding company of the Group is John Keells Holdings PLC by two Englishmen, Edwin and George John, in Colombo, Ceylon, (JKH) situated at 130, Glennie St. Colombo 2 and it has offices business opportunities in the post-independence economy spurred spread around Sri Lanka as well as the Maldives, India, Mauritius, growth and expansion throughout the ‘50s and ‘60s. With Sri Lanka Singapore, UK, USA and the UAE and Canada. becoming a Republic in 1972, social and political change helped drive John Keells’ expansion and diversification even further. Today, the company is Sri Lanka’s largest listed conglomerate, making its OPERATING STRUCTURE presence felt in every major sphere of the economy. The John Keells Group operates primarily in the areas of Transportation, Leisure, Property, Consumer Foods and Retail, John Keells Holdings PLC (JKH) is a public limited liability company Financial Services, Information Technology among others. incorporated in 1979. Its ordinary shares are listed on the Colombo Stock Exchange (CSE); and became the first Sri Lankan company to
John Keells Holdings
Consumer Financial Information Transportation Leisure Property Other Foods & Retail Services Technology
Hotel Property Ports & Consumer Insurance Services Plantation Shipping Management Development Foods Services
Office Strategic Transportation City Hotels Real Estate Retail Banking and Leasing Automation Investments
Resort IT Enabled Stock Broking Hotels Services
Destination Management
6 John Keells Holdings PLC – Sustainability Report 2010/11 The operating companies including subsidiaries and joint ventures, a description of the company and the regions they operate in are listed in the table given below.
Company by Industry Group and Sector Business Description Region **
TRANSPORTATION Ports and Shipping Keells Shipping (Pvt) Ltd Shipping agency representation & logistics services Mackinnon Mackenzie & Co (Shipping) Ltd Shipping agency representation & logistics services Transportation John Keells Logistics (Pvt) Ltd Integrated supply chain & third party logistics solutions John Keells Logistics India (Pvt) Ltd Shipping agency representation & logistics services India John Keells Logistics Lanka (Pvt) Ltd International freight forwarder & logistics services Lanka Marine Services (Pvt) Ltd Importer & supplier of heavy marine fuel oils & lubricants Mackinnon Mackenzie & Co of Ceylon Ltd * Foreign recruitment agents & consultants Trans-ware Logistics (Pvt) Ltd * Integrated container depot operations & logistic services Whittall Boustead (Pvt) Ltd - Cargo Division International freight forwarder & logistics services John Keells Air Services India (Pvt) Ltd General sales agents for airlines in India India Mack Air (Pvt) Ltd General sales agents for airlines Mackinnons Travels (Pvt) Ltd IATA accredited travel agent and travel related services Mack Air Services Maldives (Pte) Ltd General sales agents for airlines in the Maldives Maldives LEISURE Hotel Management Keells Hotel Management Services Ltd Manager & marketer of resort hotels John Keells Maldivian Resorts (Pte) Ltd Hotel holding company in the Maldives Maldives Holding company of group resort hotel companies in Sri Lanka and John Keells Hotels PLC * Maldives John Keells Hotels Mauritius (Pvt) Ltd * Hotel holding company in the Mauritius Mauritius City Hotels Asian Hotels and Properties PLC -Cinnamon Owner & operator of the five star city hotel “Cinnamon Grand” Grand Trans Asia Hotels PLC Owner & operator of the five star city hotel “Cinnamon Lakeside”. Resort Hotels Ceylon Holiday Resorts Ltd-Bentota Beach Owner & operator of “Bentota Beach Hotel” in Bentota Hotel Beruwala Holiday Resorts (Pte) Ltd Owner of Real Estate Hikkaduwa Holiday Resorts (Pvt) Limited Will operate Chaaya Tranz Fantasea World Investments (Pte) Ltd Owner & operator of “Chaaya Lagoon Hakuraa Huraa” in Maldives Maldives Habarana Lodge Ltd Owner & operator of “The Cinnamon Lodge” in Habarana Habarana Walk Inn Ltd Owner & operator of “Chaaya Village Habarana” International Tourists and Hoteliers Ltd * Owner of real estate John Keells Maldivian Resorts (Pte) Ltd Operator of “Chaaya Island Dhonveli “ in Maldives Maldives Kandy Walk Inn Ltd Owner & operator of “The Chaaya Citadel” in Kandy Rajawella Hotels Ltd * Owner of real estate Resort Hotels Ltd Owner of real estate Tranquility (Pte) Ltd Owner and operator of “Cinnamon Island Alidhoo” in Maldives Maldives
John Keells Holdings PLC – Sustainability Report 2010/11 7 Company by Industry Group and Sector Business Description Region **
LEISURE Hotel Management Travel Club (Pte) Ltd Operator of “Chaaya Reef Ellaidhoo” in Maldives Maldives Trinco Holiday Resorts (Pte) Ltd Owner of the “Club Oceanic Hotel” in Trincomalee Trinco Walk Inn Ltd Owner of Real Estate Wirawila Walk Inn Ltd * Owner of real estate Yala Village (Pvt) Ltd Owner and operator of “Yala Village” in Yala Destination Management Serene Holidays (Pvt) Ltd Tour operators in India India Walkers Tours Ltd Inbound tour operators Whittall Boustead (Travel) Ltd Inbound tour operators
PROPERTY
Property Development
Asian Hotels and Properties PLC - Crescat Developer and manager of integrated properties Boulevards, The Monarch, The Emperor
Real estate J K Properties (Pvt) Ltd Property developers Keells Realtors Ltd Owner of Land and building Whittall Boustead Ltd - Real Estate Division Renting of office space John Keells Residential Properties (Pvt) Limited CONSUMER FOODS AND RETAIL Consumer Foods Beverages, frozen confectionery, processed meats, dairy products and Ceylon Cold Stores PLC holding company of JayKay Marketing Services (Pvt) Ltd Manufacturer and distributor of branded meat and convenience food Keells Food Products PLC products.
Manufacturer and distributor of branded meat and convenience food John Keells Foods India (Pvt) Ltd India products.
Keells Food Products Mauritius (Pvt) Ltd * Investment holding company Mauritius Retail JayKay Marketing Services (Pvt) Ltd Operator of “Keells Super” chain of supermarkets FINANCIAL SERVICES John Keells Stock Brokers (Pvt) Ltd Share broking services Union Assurance PLC Life and general insurance underwriters INFORMATION TECHNOLOGY IT Services John Keells Computer Services (UK) Ltd Software development services (UK) UK John Keells Computer Services (Pvt) Ltd Software services John Keells Software Technologies (Pvt) Ltd Marketer of software packages Office Automation John Keells Office Automation (Pvt) Ltd Dealers in office automation equipment IT Enabled Services Auxicogent Alpha (Pvt) Ltd * Investment holding company Mauritius
8 John Keells Holdings PLC – Sustainability Report 2010/11 Company by Industry Group and Sector Business Description Region **
INFORMATION TECHNOLOGY Office Automation Auxicogent Alpha (Pvt) Ltd * Investment holding company Mauritius Auxicogent Holdings (Pvt) Ltd. Holding company of Auxi group companies Mauritius Auxicogent International (Pvt) Ltd * Investment holding company Mauritius Auxicogent International Lanka (Pvt) Ltd BPO operations To manage the US based Sales Team for Quatrro Business Support Auxicogent International US Inc US Services Auxicogent Investments Mauritius (Pvt) Ltd * Investment holding company Mauritius InfoMate (Pvt) Ltd IT enabled services OTHERS Plantation Services John Keells PLC Commodity brokers John Keells (Teas) Ltd * Manager of bought tea factories & others John Keells Warehousing (Pvt) Ltd Warehousing of rubber and tea Tea Smallholder Factories PLC Owner and operator of factories for tea smallholders Strategic Investments Facets (Pvt) Ltd * Owner of real estate John Keells Holdings Mauritius (Pvt) Ltd * Holding company in the Mauritius Mauritius Regional holding company providing administrative & function based John Keells International (Pvt) Ltd services J K Packaging (Pvt) Ltd * Printing and packaging services provider for the export market John Keells Singapore (Pte) Ltd International trading services Singapore Keells Consultants Ltd Company secretarial services to the group Mackinnon and Keells Financial Services Ltd * Rental of office space Mortlake Ltd * Investment company Nexus Networks (Pvt) Ltd Operator of a loyalty card programme
* Non Operational Company/Investment Company/Land only/Holding Company/Investment Holding Company/Managing company/Rental of office spaces
** In Sri Lanka if not specified
John Keells Holdings PLC – Sustainability Report 2010/11 9 The companies serve a variety of customers ranging from individuals • Purchase of Shares in John Keells Residential Properties for to businesses to governments. The primary customers served by Rs. 925 Mn in exchange of land at Union Place the sectors are: • Individual - Consumer Foods & Retail, IT, Financial Services, • Invested Rs. 146.75 million to convert Nations Trust Bank Property, Leisure warrants to shares. • Businesses - IT, Transportation, Leisure, Other (Plantation Services) • Purchased the head lease of Dhonveli Island for a period of 18 • Government - IT years
These services are provided through the primary brands listed • Invested Rs.947 Mn by participating in a rights issue of its below:- subsidiary International Tourists and Hoteliers Limited thereby • Transportation – John Keells Logistics increasing its effective share holding to 98.39%. • Leisure – Cinnamon Hotels and Resorts, Chaaya Hotels and Resorts • Invested Rs. 600 Mn by subscribing to the rights issue of its • Property – John Keells Land fully owned subsidiary Beruwela Holiday Resorts (Pvt) Limited • Consumer Foods and Retail – Elephant, Fountain Café, Keells, for the purpose of funding the construction of Chaaya Bey Keells Super, Super K, Krest, K Choice, KIK Hotel.
The above brands include brands which have been introduced newly • Invested Rs. 485 Mn by participating in a rights issue of its during the reporting period. subsidiary Ceylon Holiday Resorts Limited and thereby increased its effective share holding to 98.65%. Ceylon Holiday The total employee population of the Group was 11,186; while the Resorts Limited thereafter invested Rs. 485 Mn in Hikkaduwa Group’s net asset value as at 31 March 2011 was Rs. 59.59 billion. Holiday Resorts (Pvt) Limited for the purpose of funding the Total equity for the year was Rs. 67.19 billion and total debt for the refurbishing and upgrading of Coral Gardens Hotel. year was Rs. 14.64 billion. Net sales amounted to Rs. 60.50 billion.
John Keells Holdings had growth opportunities to most of its DIVESTMENTS businesses due to the end of the war. Consumer Foods and Retail • Divested 37.5 Mn shares of John Keells Hotels PLC with its distribution network expanding to the North and the East and Financial Sector, primarily Union Assurance opening branches in • Divested the head lease of Alidhoo Island in Maldives these areas benefited the most. Resort hotels re opened the “Club Oceanic” hotel in Trincomalee under the name of “Chaaya Blu” with • Divested 11.62 Mn shares of Asian Hotels & Properties for the number of rooms expanded to 81. They also commenced the Rs. 1.98 Bn construction of a new 200 room resort hotel in Beruwala which will be branded “Chaaya Bey” and embarked on a complete refurbishment of the Coral Gardens Hotel in Hikkaduwa which will be re-launched CHANGES IN SHARE CAPITAL later this year as “Chaaya Tranz”. The Property Sector commenced the construction of 3 residential towers each 36 storeys high housing Total number of JKH shares in issue as at 31 March 475 residential units in Colombo. The Consumer Foods sector 2010/11 629,692,367 launched a new cola drink in to the domestic market by the name 2009/10 619,473,632 of KIK COLA. 2008/09 611,352,996 The use of outsourced products and services for the primary business operations are limited to the companies where it is an industry practice to do so or it has been proven to be an efficient and effective business model versus performing these functions in- house. For example, in the transportation industry group, certain transportation and loading functions as well as the barge crew and warehousing staff are outsourced to gain maximum efficiency in the respective operations. Similarly, the production and or the packaging of certain products in the Consumer Foods and Retail industry group too are outsourced.
SIGNIFICANT CHANGES DURING THE REPORTING PERIOD Acquisitions and Investments • Acquired 5.604 Mn shares (14.9%) in Union Assurance PLC
• Additional equity infusion of Rs. 65 million to John Keells Logistics Lanka (Pvt) Ltd
10 John Keells Holdings PLC – Sustainability Report 2010/11 AWARDS WON BY GROUP COMPANIES – 2010/2011
Industry Group Company/ Business Unit Awards Received
Transportation
Mackinnons Travels (Pvt) Ltd. • Gold award - Singapore Airlines for Top Agent - 2010/11
Mack Air (Pvt) Ltd • American Airlines Cargo - Eagle Award
Leisure
City Hotels Cinnamon Lakeside • Total of 28 medals and 2nd place among the 5 Star City Hotels - Culinary Art 2010 • Gold and Silver Awards - Cocktail and Mocktail Competition - Chefs› Guild of Sri Lanka 2010 • Best Spiced Ice Cream - World Spice Food Festival 2010 • ‘Most Honoured Citizens award from Colombo Municipal Council (CMC), in recognition of the valuable contribution the hotel has made towards city development by making payment of Municipal rates and taxes on time and without arrears during the past five years. • Green Globe Certification • Colombo Region 1st Place in Classic Category and All Island 2nd Place in the Flairing Category - Marie Brizard Cocktail Competition • Gold Award in Hospitality and Hospitality Related Travel Category - Sri Lanka Malaysia Business Council • Certificate of Commendation in recognition of Excellence in Cleanliness and Food Hygiene - Colombo Municipal Council • ICASL Awards 2010 - Hotel Sector - Bronze Award
Cinnamon Grand • Best Classic Cocktail Category Award – National All Island Marie Brizard Bartender Competition • Best “Spiced Tea” Category Award - World Spice Food Festival • Best Hotel Award - CMC Public Health Department • Crowns for Food Hygiene Certificate with 5 out of 5 ‘Crowns’ for food hygiene
Resort Hotels John Keells Hotels PLC • STING Corporate Accountability Rating - Gold Award for 2011 • Institute of Chartered Accountants of Sri Lanka Annual Reports (ICASL) Awards 2010 - Gold Award in the Hotel Sector
Chaaya Island Dhonveli • First Choice Travel Company Gold Award for Chaaya Island Dhonveli for Customer Satisfaction for 2010
Chaaya Reef Ellaidhoo • TUI-UK First Choice Travel Company Gold Award for Chaaya Island Ellaidhoo for Customer Satisfaction for 2010
Leisure Inbound Walkers Tours (Pvt) Ltd • Presidential Awards 2010 - Best Tour Operator – Domestic, Airlines: Contribution to Tourism - Best Charter Airline of the Year handled by Walkers Tours Ltd, Best Niche Operation: Adventure - Nature Odyssey (Brand of WTL), Excellence in Service: Best Chauffeur Tourist Guide Lecturer, Excellence in Service: Best National Guide Lecturer
Whittalls Boustead (Pvt) Ltd • Presidential Awards 2010 - Excellence in Service: Best National Guide Lecturer
Consumer Foods & Retail
Ceylon Cold Stores (CCS) • ICASL Awards 2010 - Food and Beverages Sector – Gold Award • SLIM-Nielsen Peoples Awards 2010 – Most Popular FMCG Beverage Brand of the Year for Elephant House Cream Soda
Keells Food Products PLC (KFP) • ICASL Awards 2010 - Food and Beverages Sector - Silver Award • NCE Export Award 2010 - Silver Category
John Keells Holdings PLC – Sustainability Report 2010/11 11 AWARDS WON BY GROUP COMPANIES – 2010/2011 contd.
Industry Group Company/ Business Unit Awards Received
Information Technology
John Keells Office Automation • National Gold Award 2010 for Toshiba Notebook Long Outstanding Partner – South Asia Region • The Best New Partner – FEC POS Solutions and second place – Success Story Competition at FEC Global Partner Conference 2010 – Hangzhou, China.
Financial Services
Union Assurance PLC (UA) • ICASL Awards 2010 - Excellence in Annual Financial Reporting - joint overall 2nd place, Corporate Governance Disclosures - overall 2nd place and 1st place in the Insurance Sector • SAFA Annual Reports Awards 2010 - 3rd place overall, 1st in Corporate Governance Disclosures, 1st in Insurance Sector • HRM Awards – 2010 - HRM Silver Award • National Business Excellence Awards - 1st in the Insurance Sector, 2nd place overall for Performance Management Practices • National Chamber of Industries - Achiever Award for Industrial Excellence and Silver Award Extra Large Category - Service Sector • Achiever Award for Industrial Excellence – Silver Award for Service Sector Extra Large Category Service Sector
Others
John Keells Holdings PLC • HRM Awards 2010 - Super 10 – Gold Award Winner • ICASL Awards 2010 - Excellence in Annual Financial Reporting - Joint Winners Bronze, Corporate Social Responsibility Reporting Awards – Gold award, Diversified Holdings (Groups above 5 subsidiaries) - Joint Sector Gold Award • ACCA Awards 2010 - Winner in Sustainability Reporting • South Asian Federation of Accountants (SAFA) - Best Presented Accounts Awards 2009 for Hospitality, Health, Transport & Shipping Category - Joint Winners • STING Corporate Accountability Rating - Platinum Award for 2011
Tea Smallholder Factories PLC • “Silver Flame” - Medium Category of the Manufacturing Sector of the Sri Lanka National Energy Efficiency Awards 2010 • ICASL Awards 2010 - Manufacturing Sector - Bronze Award
John Keells PLC • ICASL Awards 2010 - Certificate of Compliance for Sector - Diversified Holdings (upto 5 subsidiaries)
12 John Keells Holdings PLC – Sustainability Report 2010/11 ISO CERTIFICATION FOR GROUP COMPANIES – 2010/2011
Industry Group Company/ Business Unit ISO Certification Transportation Mackinnons Travels (Pvt) Ltd. ISO 9001:2008 Mack Air (Pvt) Ltd ISO 9001:2008 Leisure City Hotels Cinnamon Grand Colombo ISO 22000 for Food Safety ISO 14001 for environment OHSAS 18001 for employee & Guest safety Cinnamon Lakeside Colombo ISO 22000:2005 Resort Hotels Cinnamon Lodge Habarana ISO 22000:2005 Chaaya Island Dhonveli ISO 22000:2005, OHSAS 18001:2007 Chaaya Village Habarana ISO 14001:2004, ISO 22000:2005, OHSAS 18001:2007 Chaaya Citadel Kandy ISO 14001:2004, OHSAS 18001:2007, ISO 22000:2005 Chaaya Lagoon Hakuraa Huraa ISO 22000:2005, OHSAS 18001:2007, ISO 14001:2004 Bentota Beach Hotel ISO 14001:2004, OHSAS 18001:2007, ISO 22000:2005 Chaaya Reef Ellaidhoo ISO 14001:2004, ISO 22000:2005, OHSAS 18001:2007 Chaaya Blu Trincomalee ISO 22000:2005 Inbound Walkers Tours Ltd ISO 9001:2008, ISO 14001:2004 Whittall Boustead (Travel) Ltd. ISO 9001:2008, ISO 14001:2004 Consumer Foods & Retail Ceylon Cold Stores (CCS) PLC ISO 22000:2005, ISO 9001:2008/SLS ISO 9001:2008 ISO 9000 in 2008 and is valid for 3 years. Keells Food Products PLC (KFP) ISO 9001:2008/SLS ISO 9001:2008, ISO 22000 Information Technology John Keells Computer Services (JKCS) ISO 9001: 2008 John Keells Office Automation (JKOA) ISO 9001: 2008 InfoMate ISO/IEC 27001: 2005 Others John Keells Holding PLC ISO 9001:2008 Tea Smallholder Factories PLC – Neluwa Tea ISO 22000:2005 Factory John Keells Warehousing (Pvt) Ltd ISO 22000:2005
John Keells Holdings PLC – Sustainability Report 2010/11 13 SUSTAINABILITY POLICY AND FRAMEWORK “John Keells Group continues to report on sustainability periodically as per the Global Reporting Initiative (GRI) framework, and constantly reviews its policies, practices and targets pertaining to sustainability based on feedback received via regular and on-going stakeholder engagements.”
SUSTAINABILITY POLICY Sustainable development is a globally accepted approach to sustaining economic growth without harming our planet or exhausting its resources while improving the quality of life for its current and future inhabitants. Long term value creation for our varied stakeholder groups depends on the sustainability of the performance of our businesses, our environment and the communities in which we operate. In this endeavour, we are committed to achieving the highest standards of corporate citizenship.
OUR POLICY
• The Group will strive to conduct its activities in accordance with the highest standards of corporate best practice and in compliance with all applicable local and international regulatory requirements and conventions.
• The Group monitors and assesses the quality and environmental impact of its operations, services and products whilst striving to include its supply chain partners and customers, where relevant and to the extent possible.
• The Group is committed to transparency and open communication about its environmental and social practices in addition to its economic performance. It seeks dialogue with its stakeholders in order to contribute to the development of global best practice, while promoting the same commitment to transparency and open communication from its partners and customers.
• The Group strives to be an employer of choice by providing a safe, secure and non-discriminatory working environment for its employees whose rights are fully safeguarded and who can have equal opportunity to realise their full potential. All Group companies will abide by national laws and wherever possible will strive to emulate global best practice governing the respective industry groups, seeking continuous improvement of health and safety in the workplace.
• The Group will promote good relationships with all communities of which we are a part and enhance their quality of life and opportunities while respecting people’s culture, ways of life and heritage.
14 John Keells Holdings PLC – Sustainability Report 2010/11 HOW WE DO IT Last year, all companies in which JKH has a controlling interest were subjected to the Group’s sustainability policy as per the relevance to their business. Frequent awareness and integration of sustainability within the organisation helped encourage all Group companies to implement similar policies.
This year, the John Keells Group took its sustainability process one step further, gradually transforming it from being a centrally- driven exercise to making it a priority of each and every one of the Group’s businesses. With the onus and responsibility of the entire sustainability process now lying with each business unit, the Group is moving steadily towards engraining this approach across all of its businesses. This important shift in the implementation process has elicited greater participation at all levels within the businesses which the Group sees as an important cornerstone of the integration process going forward.
Further encouraging and empowering the Group’s staff to be proactive on sustainable performance, not only at work, but also at home and in the community, and monitoring its performance against a progressively stringent yardstick has also further helped to strengthen the John Keells’ sustainability process. Similar to last year, the John Keells Group continues to report on sustainability periodically as per the Global Reporting Initiative (GRI) framework, and constantly reviews its policies, practices and targets pertaining to sustainability based on feedback received via regular and on- going stakeholder engagements. This progressive approach by the Group will ensure that sustainability is indeed here to stay.
John Keells Holdings PLC – Sustainability Report 2010/11 15 CORPORATE GOVERNANCE “John Keells Group is committed to the highest standards of business integrity, ethical values and professionalism in all its activities towards rewarding all its stakeholders with greater creation of value, year-on-year.”
The John Keells Group is committed to the highest standards JKH corporate governance philosophy practiced is in full compliance of business integrity, ethical values and professionalism in all its with the following and where necessary, any deviations as allowed by activities towards rewarding all its stakeholders with greater creation the relevant rules and regulations have been explained. of value, year-on-year. • Companies Act of 2007 • Listing rules of the Colombo Stock Exchange (CSE) and This philosophy has been institutionalised at all levels in the Group subsequent revisions up to 1st April 2011 through a strong set of corporate values and the written code of • The recommendations of the Combined Code of 2010 to the conduct as given below, that all employees, senior management extent that they are practicable in the context of the nature of and the Board of Directors are required to follow in the performance our diverse businesses and their risk profiles. of their official duties and in other situations that could affect the • All provisions of the Code of Governance of the Institute of Group’s image. The behaviours of JKH staff at executives and Chartered Accountants of Sri Lanka. above levels, particularly the senior management are monitored regularly including through an annual 360° feedback. All the Group’s BOARD RESPONSIBILITIES AND DECISION RIGHTS recognition schemes insist, as a minimum, that all nominees have The Board of Directors is accountable to the shareholders for the lived the JKH values. governance of the company. All directors share a responsibility in ensuring the highest standards of disclosure and reporting, ethics OUR VALUES and integrity across the Group. Powers specifically reserved for the We are passionate about board include – • Changing constantly, re-inventing and evolving • Striving to get things right the first time • Providing direction and guidance to the company in the • Doing the right things always formulation of its strategies with emphasis on the medium and • Constantly raising the bar long term in the pursuance of its operational and financial goals • Fostering a great place to work • Approving annual budgets and strategic plans • Building strong relationships based on openness and trust • Reviewing HR processes with emphasis on top management succession planning CODE OF CONDUCT • Appointing and reviewing the performance of the Chairman- The four basic principles of the JKH code of conduct and ethics, are; CEO • The allegiance to the Company and the Group • Monitoring systems of governance and compliance • The compliance with rules and regulations applying in the • Overseeing systems of internal control and risk management territories that the group operates in • Determining any changes to the discretions/authorities • The conduct of business in an ethical manner at all times and delegated from the board to the executive levels in keeping with acceptable business practices • Approving major acquisitions and disposals and capital • The exercise of professionalism and integrity in all business and expenditure ‘public’ personal transactions • Approving any changes to constitutional documents • Approving the issue of JKH equity/debt securities
16 John Keells Holdings PLC – Sustainability Report 2010/11 BOARD COMPOSITION AND INDEPENDENCE Independence of the Directors have been determined in As at 31st March, the board consists of 9 Directors - accordance with CSE Listing Rules and the 6 independent non- • 3 executive Directors and executive members have submitted signed confirmations of their • 6 non-executive Independent directors. independence.
Family Material Continuously Non Executive/ Management/ Employed by member a Shareholding 1 Business served for nine Independent Director 2 the Company 4 director or Relationship 3 years 6 Directors (NED/ID) CEO 5 F Amerasinghe I Coomaraswamy T Das S Enderby D Rodrigo S Tiruchelvam
Compliant Compliant with explanation
Definitions Explanation 1 Shareholding carrying not less than 10% of voting rights None of the individual ED or NED/ID shareholding exceeds 1% None of the NED/ 2 Director of another company** IDs are directors of another related party company as defined NED/ID income/cash 3 Income/Non cash benefit equivalent to 20% of the director's income benefits are less than 20% of individual director income 4 Two years immediately preceding appointment as director 5 Close family member who is a director or CEO None of the NED/ID are employed or have been employed at JKH No family 6 Has served on the board continuously for a period exceeding nine members of any ED or NED/IDs is a director/CEO of a related party company see years note below
Note: All directors make a formal declaration of all their interest on an annual basis. Based on such declarations and notwithstanding that Franklyn Amerasinghe and Tarun Das have completed 9 consecutive years, the board considers them 'independent' given their objective and unbiased approach to matters of the Board.
** Other companies in which a majority of the other directors of the listed company, are employed, or are directors or have a significant shareholding or have a material business relationship
BOARD MEETINGS, AGENDA AND ATTENDANCE CONFLICTS OF INTEREST AND INDEPENDENCE As a general rule, the board of JKH meets once every quarter, in the Each director has a continuing responsibility to determine whether least. During the year under review, the board met on five occasions he or she has a potential or actual conflict of interest arising from which is one more than the recommended due to a special meeting external associations, interests in material matters and personal that was held. Sustainability has been discussed in each of the four relationships which may influence his judgment. Such potential regular Board meetings held during the year conflicts are reviewed by the board from time to time.
John Keells Holdings PLC – Sustainability Report 2010/11 17 Prior to Appointment Once Appointed During Board meetings
Nominees are requested to make Once appointed to the board, all Directors who have had an interest in a known their various interests that could directors are expected to inform the matter under discussion potentially conflict with the interest of the board and obtain board clearance prior • Excuse themselves from company. to deliberations on the subject matter • Accepting any new position • Abstain from voting on the subject • Engaging in any transaction that matter. (Abstentions, where could create a potential conflict of applicable, from board decisions, interest are duly minuted) All NEDs are required to notify the Chairman-CEO of changes to their current board representations or interests.
Details of companies in which board members hold board or board The board has delegated some of its functions to board committees. committee membership is available with the company for inspection While retaining final decision rights pertaining to matters under the by shareholders on request. purview of these committees.
The board has, subject to pre-defined limits, delegated its executive authority to the Chairman-CEO who exercises this authority through ROLE OF THE CHAIRMAN -CEO the Group Executive Committee (GEC), which he heads and to which The Chairman, who is also the Chief Executive Officer (CEO), he provides leadership and direction. is responsible for: • leading the board and for its effectiveness ROLE OF THE CHAIRMAN-CEO • executing the strategies and policies of the board. The Chairman-CEO had structured direct discussion with the non- The Chairman, while leading the board in effectively executive directors during the year subsequent to meeting conveyed discharging its duties towards all stakeholders, ensures with by the Senior Independent Director with the Non-Executive the assistance of the Board Secretary, that: Director. Issues arising from such discussion have been actioned in • board procedures are followed consultation with the effected persons • directors receive timely, accurate and clear information • there are updates on matters arising between meetings APPROPRIATENESS OF COMBINING ROLES OF CHAIRMAN • board agendas are dispatched two weeks prior to the AND CEO board meeting leaving 10 clear calendar days for the The appropriateness of combining the roles of Chairman and CEO directors to read the material has been discussed regularly and in the minimum, once per year. On the basis of such discussions and the ‘pros’ and ‘cons’ that emerged The Chairman: from the review by the Boston Consulting Group, the board deems • sets the tone for the governance and ethical framework that combining the two roles is more appropriate for the Group at of the Group present, in meeting stakeholder objectives in a conglomerate setting. • ensures that constructive working relations are maintained between the executive and non-executive As the head of the Group Executive Committee (GEC), the Chairman- members of the board CEO provides the overall direction and policy/execution framework for the board’s decisions via this structure. Experience has proved As the CEO, he guides and supervises executive directors that this structure has enabled him to effectively balance his role as in striking a balance between their board and executive the Chairman of the board and the CEO of the company/Group. responsibilities. An overview of the delegation of board functions and the delegation of the executive authority are graphically illustrated on the facing page.
18 John Keells Holdings PLC – Sustainability Report 2010/11 BOARD OF DIRECTORS’ DELEGATION OF AUTHORITY
Board of Remuneration Audit Nominations Directors Committee* Committee* Committee*
6 Non-Executive 3 Independent 4 Independent 3 Independent Independent Directors Directors Directors Directors 3 Executive Directors 0 Executive 0 Executive Chairman-CEO Directors Directors of JKH
Chairman-CEO of JKH Chairman- Group Finance Director CEO CEO of JKH Group Financial Controller Head of Risk Control & Review External Auditors Group Executive Group Committee (GEC) 3-Executive Directors Includes Head 6 Presidents of Sustainability Group Operating Committee (GOC) ** GEC + 12 Executive Vice Presidents Group Industry/ Management function Committee (GMC)
Industry/ Sector function/ SBU/ Sector Committee
Business/ Management function/ BU/ Committee *All three committees are chaired by independent directors appointed by the board Departmental Note: Descriptions of committees are given later in this section
John Keells Holdings PLC – Sustainability Report 2010/11 19 GROUP EXECUTIVE COMMITTEE (GEC) AND SUCCESSION Each industry group and key functions have GMCs, sector and PLANNING management committees as appropriate. Business and function units are encouraged to take responsibility and accountability to the lowest possible level via suitably structured committees and teams in management by setting objectives. ROLE OF THE GEC The GEC is the overlay structure, under the leadership and The agendas of these committees are carefully structured to avoid direction of the Chairman-CEO, that duplication of effort and ensure that discussions and debate are • Implements the policies and strategies determined by complementary both in terms of a bottom-up and top-down flow of the board accountabilities and information. As stated earlier, the responsibility • Manages, through delegation and empowerment the and accountability lie with the Chairman-CEO, the presidents, the business and affairs of the Group sector/functional heads and the profit centre/function managers as • Makes portfolio decisions and prioritises the allocation applicable. of capital, technical and human resources. The introduction of peer adjusted organisational ratings in 2007/08 The GEC also assists the Chairman-CEO in in determining pay for performance has resulted in the search • Succession planning and the appointment of presidents, by business units, sectors and industry group of productivity sector heads, functional heads and other senior enhancements, process improvements and cost efficiencies within managers, a framework of better teamwork. • The career management of assistant vice presidents and above. OPERATIONS PLANNING, MONITORING AND DECISION RIGHTS Responsibility for monitoring and achieving plans as well as ensuring compliance with group policies and guidelines rests with the, As at 31 March 2011, the 9 member GEC consisted of the Chairman- Presidents, Sector Heads, and the Chief Executive Officers of each CEO, the Deputy Chairman, the Group Finance director and the Group company and heads of functions at the corporate centre at Presidents of each industry group. the business unit and function levels.
The succession planning process by the GEC is well tested where At the GMC level and above, the focus is more on headline financial proactively a pool of potential successors for a number of key and non-financial indicators, strategic priorities, risk management, positions are identified and earmarked for specific training and use of IT as a tool of competitive advantage, new business development as is necessary. development, continuous process improvements and human resource management. A key feature of the JKH operating model is that the GEC members, particularly the presidents, not only play a mentoring role, but are MONITORING OF FINANCIAL DATA: totally accountable for the businesses and functions under them. • Actual financials are compared against the original plan and/or the reforecast on a monthly basis at GMC, Sector Committee, GROUP OPERATING COMMITTEE (GOC) Management Committee and Departmental Committee levels As at 31 March 2011, the 21 member GOC consisted of the • Actual financials are reviewed at least quarterly by the GEC. Chairman-CEO, the Deputy Chairman, the Group Finance Director, • The Presidents and Executive Vice Presidents, the CEOs of the Presidents and the Executive Vice Presidents. business units and managers of functions are able to view online, the information relevant to their areas of responsibility. The GOC provides a platform to share learning on issues that cross • The Chairman-CEO and the GEC are able to view key financial industry groups, sectors, business units and functions. It is also the information for all Group companies on a real time basis via the forum to discuss Group strategy, group initiatives and Group best Group ERP system. practices. Its main purpose is to act as a glue binding the various businesses within the Group towards identifying and extracting REMUNERATION Group synergies in implementing them. Pay for performance At JKH, the employees are rewarded with a customised ‘pay for GROUP MANAGEMENT COMMITTEE (GMC) AND OTHER performance’ scheme based on the following: COMMITTEES AND SUCCESSION PLANNING • Manager and above level: Performance is measured annually on The other key operating committees are the GMCs, the Sector well defined individual and organisation objectives and metrics Committees and the Management Committees that focus on: which reflect, and are positively correlated to, the company’s • strategy objectives, thereby aligning employee, management and • performance monitoring stakeholder interests. • career management and succession planning of employees • Assistant Manager and Executive level: individual performance below assistant vice president level rating only. • risk management and • group initiatives The rationale for the exclusion of organisational rating at Assistant Manager and executive levels was that individuals at those levels For and at an industry group, sector, strategic business unit and had little direct influence on the bottom line of their organisations. business unit levels respectively. Organisational ratings are determined using the annual plan as the
20 John Keells Holdings PLC – Sustainability Report 2010/11 yardstick with adjustments made, as relevant, for the organisation’s • As the decision influencing capability of a role increases, performance relative to its peers. the individual performance holds lesser weightage than the organisational performance in determining total compensation The rating system which was introduced in 2006/07 has led to and incentives. increased productivity and better performance, greater employee • Long term incentives have, up to now, taken the form of recognition and, consequently, reward and the alignment of Employee Share Options (ESOP). They have been offered to employee, management and stakeholder interests. The pay employees, in defined career levels, based on pre-determined for performance system has, as its bedrock, the performance criteria which are uniformly applied across the eligible levels. management system (PMS) and the detailed remuneration surveys Such options were offered at market prices prevailing on which the group conducts on a regular basis. A comprehensive the date of the offer. The last ESOP award was made on 9 review of the PMS was made during the year with a view to December 2010. determining whether the PMS lead to employee behaviour in line • All remuneration policies are ultimately based on considerations with what was expected when it was introduced. Any shortcomings of affordability and sustainability. identified were addressed. Additionally, the Group also engages in • Clear communication, and the transparency, of current and ongoing reviews of remuneration obtained via the participation in proposed policies are deemed a must. other corporate surveys which are relevant to the Group. The Group during 2010/11 also conducted a climate survey titled Great Place to The process mentioned above is reviewed regularly for any Work (GPTW) during the year to better understand the varying needs shortcomings and steps are taken to address any issues identified. of the staff. The GPTW survey benchmarked the group against the top 25 companies in India and the Fortune 100 companies in MAKE-UP OF REMUNERATION FOR EXECUTIVE DIRECTORS employee satisfaction aspects including credibility, management The remuneration of the Chairman-CEO and the executive directors competency and employee engagement. are determined as per the remuneration principles of the Group and falls under the responsibilities of the Remuneration committee. At The pay for performance system has, as its bedrock, the this higher level, the benchmark weightage between individual and performance management system (PMS) which the Group has been organisation performances in establishing compensation is 20:80. perfecting over the last few years and the detailed remuneration surveys which the group conducts on a regular basis. Additionally, The remuneration of executive directors have a significant element the Group also engages in ongoing reviews of remuneration obtained which is variable, such variability being linked to the peer adjusted via the participation in other corporate surveys which are relevant consolidated Group bottom-line and minimum returns on shareholder to the Group. The group during 2010/11 also conducted a climate funds. survey titled Great places to Work (GPTW) during the year to better understand the varying needs of the staff. The Executive Directors, like other eligible employees, have received employee share options based on role responsibility and actual Key principles performance. The number of options so awarded was recommended The Group believes in a Compensation Policy based on equal pay for to the board by the Remuneration Committee. Such options were equal roles, irrespective of gender. awarded at the closing market price on the date of award. The last ESOP award was made on the 9th December 2010. The key principles underlying the group’s remuneration policy are- • All Assistant Vice President (AVP) and above roles across the The share options made available to each of the Executive Directors group have been banded by an independent third party on the for the year has been disclosed in the Annual Report of the Board of basis of the relative worth of jobs, thereby enabling internal Directors 2010/11. Disclosures have been also been made to the equity. Colombo Stock Exchange as an when executive directors exercised • Fixed compensation is set at levels that are competitive their options or sold their shares. to enable the recruitment and the retention of high calibre executives in the identified career levels/job bands - as guided MAKE-UP OF REMUNERATION FOR NON-EXECUTIVE by the median, 65th percentile and 75th percentile of the best DIRECTORS comparator set of companies (from Sri Lanka and the region, Compensation of NEDs is determined in reference to fees paid to where relevant). other NEDs of comparable companies. The fees received by NEDs is • Compensation, comprising of fixed (base) payments, short determined by the board and reviewed annually. term incentives and long term incentives are tied to individual performance at all levels and organisational performance at NEDs receive a fee for devoting time and expertise for the benefit manager levels and above. of the Group in their capacity as Director and additional fees for • Performance is measured annually on well defined individual either chairing or being a member of a committee. NEDs do not and organisation objectives and metrics which reflect, and receive any performance/incentive payments and are not eligible to are positively correlated to, the company’s objectives, thereby participate in any of the Group’s pension plans or share option plans. aligning employee, management and stakeholder interests. Non-executive fees are not time bound or defined by a maximum/ Organisational ratings are additionally modified to reflect minimum number of hours committed to the Group per annum, and market conditions via a set of pre-agreed peer comparators. hence is not subject to additional/lower fees for additional/lesser time • The more senior the level of management, the higher the devoted. proportion of the incentive component, and thereby lower the proportion of the fixed (base) component in the total target compensation.
John Keells Holdings PLC – Sustainability Report 2010/11 21 BOARD EVALUATION The scoring, and open comments, were collated by the Senior The board continued with its annual board performance appraisal in Independent Director (SID) and the results were analysed to give the 2010/11. It is a formalised process of self appraisal, whereby each board an indication of its effectiveness as well as areas that required member assesses, on an anonymous basis, the performance of the addressing and/or strengthening. Despite the original anonymity of board under the headings of- the remarks, the open and frank discussions that follow, including • role clarity and effective discharge of responsibilities (in relation some directors identifying themselves as the person making the to the responsibilities highlighted earlier in this report) remark, reflects the keenness of the board to make themselves • people mix and structures more effective. The evaluations revealed that whilst areas previously • systems and procedures identified as weak had strengthened, there were others which could • quality of participation be further improved. • board image.
The Remuneration Committee, appraises the performance of the Chairman-CEO on the basis of pre-agreed objectives for the Group set in consultation with the board as follows.
Group’s performance Group’s performance Soft Issues* Against plan • Against peers Company Image • Revenue growth Customer Orientation • Market share Human Resource Management • Profit growth Societal Trust • Earnings per share
BOARD APPOINTMENTS and is the Vice Chairman of the Ceylon Chamber of Commerce as The responsibility for identifying and proposing suitable candidates well as the Chairman of the Sri Lanka Tea Board. He has over 33 for appointment as Non-Executive Director of JKH, in keeping with years of management experience, all of which is within the John the target board composition and skill requirements, lies with the Keells group. Nominations Committee. The mandate of the committee remains;- • To recommend to the board the process of selecting the Ajit Gunewardene - Deputy Chairman Chairman and the Deputy Chairman Ajit Gunewardene is the Deputy Chairman of John Keells Holdings • To identify suitable persons who could be considered for PLC and has been a member of their Board for over 18 years. He appointment to the board as non-executive directors is a Director of many companies in the John Keells Group and is • Make recommendation on matters referred to it by the board the Chairman of Nations Trust Bank PLC and Union Assurance PLC. He is a member of the board of Nanco (Pvt) Ltd, a company The committee continues to work closely with the board in reviewing, established for the development of Nanotechnology in Sri Lanka the current and the emerging needs of the group in determining the under the auspices of the Ministry of Science and Technology. He future composition of the Board. The emerging needs combined has also served as the Chairman of the Colombo Stock Exchange. with the objectives and the strategies set for the coming years are Ajit Gunewardene has a degree in Economics and brings over 29 considered key when identifying skill sets required. The nominations years of management experience. committee based on these requirements then scans the external environment to identify potential candidates that can add value to Ronnie Peiris - Group Finance Director the existing board. Dr. I Coomaraswamy was appointed to the board Appointed to the John Keells Holdings PLC board during 2002/03, as at 7th February 2011. Ronnie Peiris has overall responsibility for Group’s Finance and Accounting including Taxation, the Information Technology function Currently the Board members have varying qualifications in and Group Initiatives. He was previously the managing director of economic, environmental and social topics and are involved in many Anglo American Corporation (Central Africa) Limited in Zambia. committees and associations that serve the business community as a whole. Highlighted below are economic, environmental and social Ronnie has over 40 years finance and general management work the Board of Directors are involved in. experience in Sri Lanka and abroad. He is a Fellow of the Chartered Institute of Management Accountants, UK; Association of Chartered Susantha Ratnayake - Chairman-CEO Certified Accountants, UK, and the Society of Certified Management Susantha Ratnayake was appointed as the Chairman and CEO of Accountants, Sri Lanka, and holds an MBA from the University John Keells Holdings PLC in January 2006 and has served on the of Cape Town, South Africa. He is a member of the committee of JKH board since 1992/93. He is also the Chairman of many of the the Ceylon Chamber of Commerce, Chairman of its Taxation sub listed and un-listed companies within the Group. He is a council committee and also serves on its Economic, Fiscal and Policy member of the Employers’ Federation of Ceylon, serves on various Planning Sub Committee. He is the Vice President of Institute of clusters of the National Council of Economic Development (NCED) Directors.
22 John Keells Holdings PLC – Sustainability Report 2010/11 NON-EXECUTIVE DIRECTORS He is a non-Executive Chairman, Haldia Petrochemicals Ltd; Member Franklyn Amerasinghe of the Board of Directors of West Bengal Industrial Development Appointed to the board during 1999/00, Franklyn Amerasinghe is the Corporation (WBIDC) and of John Keells Holdings PLC, Sri Lanka. former CEO and Director General of the Employers’ Federation of He was a member of the government-nominated Board of Satyam Ceylon. He was thereafter attached to the ILO as a senior specialist Computers in 2009. He is also on the International Advisory Board in the social dialogue sector in charge of Employers Organisations of ACE Insurance, USA; Member, India Advisory Board of VOITH in East Asia up to October 2002. A bachelor of law and a lawyer by (Germany); JCB (UK) profession, he is currently a consultant and trainer in social dialogue, human resource management, corporate social responsibility and Steven Enderby industrial relations, both in Sri Lanka and abroad. He has also Appointed to the board in 2005/06, Steven Enderby is currently authored books on a wide range of subjects and published papers in based in India where he is a partner in the leading emerging markets some international and local journals. He is a founder trustee of the private equity investor, Actis. His other directorships include SML Association for Dialogue & Conflict Resolution. He was also one of Isuzu, Avtec, Tema India, Halonix, and Actis Advisers. Steven holds a the founder directors of the Skills Development Fund. BSc (Hons) in economics and accounting from the Queens University of Belfast and is a member of the Chartered Institute of Management Dr. Indrajit Coomaraswamy Accountants, UK. Dr Indrajit Coomaraswamy was appointed to the John Keells Holdings PLC Board in February 2011. Deshamanya Deva Rodrigo Appointed to the board in July 2006, Deva Rodrigo, a chartered Dr. Coomaraswamy was an official in the Central Bank of Sri Lanka accountant, had a career with the international accounting and from 1974-1989. He worked in the Economic Research, Statistics consulting organisation PricewaterhouseCoopers, joining the firm in and Bank Supervision Divisions. During this time he was seconded East Africa in 1974 and serving in its London offices in 1980. He was to the Ministry of Finance and Planning (1981-89). a Founder Partner when PricewaterhouseCoopers established its Sri Lankan firm in 1981, and held the position of senior partner from He was employed by the Commonwealth Secretariat from 1990- 1992 to 30 June 2006, when he retired from the firm. He was also 2008. During that time he held the positions, inter alia, of Director, the chairman of the Ceylon Chamber of Commerce from 2004-2006. Economic Affairs Division and Deputy-Director, Secretary-General’s Office. He was subsequently Interim Director, Social Transformation He has previously held public office as a director of People’s Bank Programme Division, Commonwealth Secretariat (Jan-July 2010) and as a member of the Telecommunication Regulatory Commission. Deva was also a member of the Monetary Board of the Central Bank Dr. Coomaraswamy completed his undergraduate degree at of Sri Lanka and a member of the National Council for Administration. Cambridge University and obtained his Doctorate at the University He also serves as the Chairman Audit Committee and Non Executive of Sussex. Director of Ceylon Tobacco Co., PLC and Chevron Lubricants Lanka PLC. Tarun Das Mr Das has spent his entire working career in industry associations, Sithie Tiruchelvam starting in November 1963 with the predecessor body of Appointed to the board in January 2007, Sithie Tiruchelvam, a lawyer Confederation of Indian Industry (CII) and was the Director General of the Supreme Court of Ceylon, and specialises in corporate law, and Chief Executive of CII from April 1967 till May 2004 and Chief intellectual property law and labour law. She has obtained her LLB Mentor from June 2004 to October 2009. from the University of Ceylon in 1966, and was admitted to the Supreme Court as an Advocate in 1968. She is a Founding Partner He is Co-Chair of the Indo–US Strategic Dialogue (Track II) and of of the law firm Tiruchelvam Associates. She has been listed as a Indo-US-Japan Strategic Dialogue (Track II). He is also a member of leading lawyer in corporate and commercial matters by Chamber the India- Singapore Strategic Dialogue (Track II) and the India-China Asia Pacific. She currently serves on the board of, Central Corporate Strategic Dialogue (Track II). & Consultancy Services (Pvt.) Limited and the Nadesan Centre for Human Rights through Law. He is a LifeTime Trustee of The Aspen Institute, USA; Member, Board of Governors, East West Centre, USA; Member, International Council, AUDIT COMMITTEE FUNCTIONS The Asia Society, USA;. President, Aspen Institute India; Managing The Audit Committee oversees the Company’s financial reporting Trustee. Indian Business Trust for HIV/AIDS; Vice President, World process on behalf of the Board of Directors. The Company’s Wide Fund- India; Member of the Board of GIVE India Foundation; management has the primary responsibility for the financial Member, Board of Trustees, Public Interest Foundation; Member, statements, for maintaining effective internal control over financial Board of Governors, National Council of Applied Economic Research reporting, and for assessing the effectiveness of such control (NCAER). systems. In fulfilling its oversight responsibilities over financial reporting, the Committee reviewed and discussed the company He is a member of the Advisory Group for G-20, Ministry of Finance, and consolidated financial statements with Company management, Government of India. He is also a member of the Expert Group set up including a discussion of the quality, not just the acceptability, of the by the Planning Commission on Government-Industry Consultations accounting principles; the reasonableness of significant judgments and member of the Expert Group to formulate a jobs plan for the and assertions made; and the adequacy of disclosures in the State of J&K. Earlier, he chaired the Planning Commission Task financial statements. Force on Skills Development.
John Keells Holdings PLC – Sustainability Report 2010/11 23 The principle focus of the Committee was to provide assistance to OPEN COMMUNICATION WITH EMPLOYEES the Board of Directors of John Keells Holdings PLC in fulfilling their Employee involvement and empowerment oversight responsibility to the shareholders, potential shareholders, Top management, and other senior staff, are mandated to involve, the investment community and other shareholders relating to: as appropriate, all levels of staff in formulating goals, strategies and plans. Decision rights are defined for each level in order to inculcate a a. the integrity of the Company’s and Consolidated financial sense of ownership, reduce bureaucracy and speed-up the decision- statements making. Annual and five year plans are formulated on a bottom-up b. the effectiveness of the Company’s internal controls over basis using futuristic scenarios developed by the GEC and GMCs financial reporting and macro economic factors developed by the corporate centre. c. the Company’s compliance with legal and regulatory requirements EMPLOYEE COMMUNICATION d. the Independent External Auditors’ qualifications, performance Whilst great strides have been taken in improving both the formal and independence and informal communication within the Group, it is yet to take e. the performance of the Company’s Group Risk & Control the form, and be in the extent, that is desired. The importance Review (Group R&CR) Division and of the firms engaged to of communication, top-down, bottom-up and lateral in gaining carry out the internal audits of group entities employee commitment to organisational goals has been conveyed, extensively, and intensively, through various communiqués issued by STAKEHOLDER RELATIONSHIPS the Chairman-CEO and other senior managers. The tone from the Constructive use of AGM top in this respect has been, and is, unrelenting. In general all necessary steps are taken to facilitate the exercise of shareholder rights at AGMs. JKH ensures that it meets the regularity At JKH, employee relations are designed to enable, and facilitate, requirements in keeping the shareholders informed of AGM’s and high accessibility by all employees to every level of management. EGMs within the specified time period including mailing of notice Informal and formal dialogue on matters relating to work, as well of meetings and related documents, voting for the election of new as of general interest, are encouraged. The several channels of directors, new long term incentive schemes or any other issue of communication which have been established for varying purposes materiality that requires a shareholder resolution. include the following:
Shareholders have the opportunity at the JKH AGMs, to put forward INTERACTION WITH SENIOR MANAGEMENT questions to the board and to the Chairman-CEO of JKH and the • Practice of an ‘open door’ policy by management chairmen of the various committees, in order to have better familiarity • Feedback in the form of 360 degree evaluations for employees with the Group’s business and operational workings. The contents of at assistant vice presidents and above the Annual Report will enable existing and prospective stakeholders • Continuous feedback on the company and its management to make better informed decisions in their dealings with the company. from different perspectives by holding regular skip level meetings at assistant manager and above levels Dialogue with shareholders The company has a well-developed investor relations programme to INNOVATIVE IDEAS address the information needs of investment institutions and analysts • Availability of an online forum to forward new suggestions for regarding the company, its strategy, performance and competitive business opportunities position. Given the wide geographic distribution of the company’s • Facilitation of a knowledge sharing blog and the existence of a current and potential shareholders, this programme includes regular “bright idea” channel roadshows to Asia Pacific, Europe and the USA conducted by the Deputy Chairman and the Head of Investor Relations. Matters GRIEVANCE PROCESS discussed, and issues raised, at these meetings are brought to • Availability of a direct email address to the Chairman for the attention of the GEC and/or the board, as appropriate, and employees to bring to his notice any transgression of group addressed. values when other established avenues have not yielded results • Availability of an “independent” ombudsperson for employees The company, through its Investor Relations division, maintains an to meet if they fail to obtain satisfactory results via established active dialogue with shareholders, potential investors, investment channels in matters relating to Group values and sexual banks, stockbrokers and other interested parties. Any concerns harassment raised by a shareholder are addressed promptly at the department • Practice of exit interviews for all employees at executive level and are forwarded, when necessary, to the GEC for consideration level and above where all such reports are forwarded to and advice. Analysts reports are circulated among the GEC, as and the respective Presidents and Executive Vice Presidents when available, and its contents debated. for comment. Comments are also discussed by the Group Executive Committee The SID is available to meet and or discuss with shareholders regarding any concerns/conflicts that arise during the course of the SKIP LEVEL MEETINGS financial year. In the current year, there were instances where the SID Skip-level meetings were, once again, conducted throughout the had such correspondence with shareholders. group companies in 2010/11 for Assistant Manager and above levels. Whilst this enabled employees to interact, and discuss, with superiors who are at a level higher than their own immediate
24 John Keells Holdings PLC – Sustainability Report 2010/11 supervisor, the sincerity and the openness, of the process resulted value. Public relations and awareness have resulted in external parties in the subject employees participating in the meetings with more inquiring on the possibilities of having strategic business partnerships enthusiasm and purpose. This enabled to have a first-hand feedback in Sri Lanka. Positioning created for directors and the organisation on the aspirations of all levels of employees. The feed-back so have resulted in directors being invited to join associations and think- obtained will be used in structuring new employee processes and/or tanks and be speakers at various forums and seminars. revising existing employee processes. Environmental The JKH board believes in maintaining open-door policies for its Our constant dialogues with stakeholders and investors have employees and key stakeholders and this is promoted at all levels resulted in the emergence of the “Going Green” concept within the of the Group. organisation. This has resulted in the establishment of a task force under the sustainability reporting where goals and targets have been WHISTLEBLOWER POLICY set for the following initiatives. The employees can report to the Chairman through a communication • Energy consumption link named ‘Chairman Direct’, concerns about unethical behaviour • Carbon foot print and any violation of Group values. Employees reporting such incidents are guaranteed complete confidentiality and such Social complaints are investigated and addressed via a select committee Awareness created under stakeholder model adopted approximately under the direction of the Chairman. five years ago, has established that success of the organisation lies in how well it intertwines with society. This has led to JKH going OMBUDSPERSON from a philanthropy based organisation to one of partnership. The The Ombudsperson is to entertain complaints, from an employee or corporate social responsibility work done through the John Keells a group of employees, of alleged violations of the published Code Foundation have the support and the maximum participation of the of Conduct, when that employee or Group of employees feel that employee volunteers. an alleged violation has not been addressed satisfactorily using the available/existing procedures and processes.
TOPICS OF ECONOMIC, ENVIRONMENTAL, AND SOCIAL PERFORMANCE DISCUSSED WITH STAKEHOLDERS DURING REPORTING PERIOD Economic Dialogue encouraged through all stakeholder involvement has frequently resulted in discussion of issues pertaining to economic
MEMBERSHIPS MAINTAINED BY THE INDUSTRY GROUPS IN 2010/2011
Bombay Chamber of Commerce Freight Forwarders Association of India (FFFAI) International Air Transportation Association Sri Lanka Employers’ Federation of Ceylon (EFC) Sri Lanka Freight Forwarders Association (SLAFFA) International Air Transport Association (IATA) Agents Association Logistics and Transportation Faculty Industry Committee of the University of Moratuwa. Sri Lanka Ship Suppliers Association Association of Lanka Bunker Suppliers International Bunker Industry Association (IBIA) Transportation AMCHAM affiliate membership APG Membership SLACA Sri Lanka Association of Airline Representative European Chamber of Commerce American Chamber of Commerce Civil Aviation Authority Accredited Agent of International Air Transport Association Travel Agents Association of Sri Lanka Sri Lanka Tourism Board Italian Business Council Sri Lanka France Business Council
John Keells Holdings PLC – Sustainability Report 2010/11 25 MEMBERSHIPS MAINTAINED BY THE INDUSTRY GROUPS IN 2010/2011
Sri Lanka Association of Software and Service Companies (SLASSCOM) Member of Leading Edge Alliance Employers’ Federation of Ceylon (EFC) IT Member of Oracle Partner Network
Member of leading edge alliance Gold partnership of Microsoft Strategic partnership of IATA Member of IBM partner world Ministerial Advisory Committee on IT/BPO exports convened by the EDB Consumer Goods Forum Consumer Food & Ceylon Chamber of Commerce Retail Ceylon National Chamber of industries Employers’ Federation of Ceylon (EFC) American Chamber SKAL International Colombo (International Association of Travel & Tourism Professionals) European Chamber of Commerce of Sri Lanka (ECCSL) Dutch Burger Union Sri Lanka Malaysia Business Council Indo Lanka Sri Lanka China Business Council Sri Lanka New Zealand Business Council Tourist Hotels Association Sri Lanka German Business Council PATA Sri Lanka Japan Business Council Sri Lanka Benelux Business Council Business with Britain IATO SLAITO Bentota / Beruwela Hoteliers Association (BBHA) THASL Leisure Employers’ Federation of Ceylon (EFC) Ceylon Chamber of Commerce Wild Life Focus Group of the Sri Lanka Tourism Promotions Bureau Sri Lanka- Benelux Business Council Sri Lanka-China Business Council Friends of Sri Lanka Association, UK Sri Lanka/ German Business Council Responsible Tourism Director Convention Bureau SLITHM European Business Council SLTPB Kandy Hoteliers Association Maldives Association of Tourism Industry Member of Field Ornithology Group of Sri Lanka – Nature Odyssey Member of Cultural Triangle Hoteliers Association Natural Disaster Management of Palugaswewa Division Tourism Development Committee of Hambantota District under Hambantota District Chamber of Commerce
26 John Keells Holdings PLC – Sustainability Report 2010/11 Ceylon Chamber of Commerce Property Chamber of Construction Industry of Sri Lanka Employers’ Federation of Ceylon Colombo Stock Brokers Association Financial Services Insurance Association of Sri Lanka American Chamber of Commerce in Sri Lanka
Participant of the United Nations Global Compact INDUS (SAP user group for the Indian subcontinent) Federation of Information Technology Industry Sri Lanka (FITIS) – Sri Lanka Association for the Software Industry (SLASI) Chapter AMCHAM IT Steering Committee SLASSCOM CIO Forum Member (and Chairman for 10/11) of the Lanka Business Coalition on HIV & AIDS EFC Employers Network on Disability Sri Lanka Tea Board Ceylon Chamber of Commerce Other National Chamber of Commerce Colombo Tea Traders Association (CTTA) Colombo Rubber Traders Association (CRTA) Planters Association of Ceylon Employees Federation of Ceylon International Tea Committee Harvard Management Communications Ltd Harvard Business Review European Chamber of Commerce Sri Lanka Tea Factory Owners Association Tea Research Board of Sri Lanka
John Keells Holdings PLC – Sustainability Report 2010/11 27 ABOUT THE REPORT “The John Keells Holdings Sustainability report provides an account of our performance on the most critical issues determined on the basis of materiality. Stakeholders who would use this report include our investors, employees, customers, government, legal and regulatory bodies, and society at large.”
REPORT PROFILE is fully described in the section of this report titled “Stakeholder The John Keells Holdings Sustainability report provides information Engagement”. on the Group’s sustainability performance for the period beginning 1st April 2010 and ending 31 March 2011. Our most recent The John Keells Holdings Sustainability report provides an account of Sustainability Report was published on 31st May 2010, incidentally our performance on the most critical issues determined on the basis becoming Sri Lanka’s first to achieve a “GRI check” by the Global of materiality. Stakeholders who would use this report include our Reporting Initiative Organisation. This year’s report is the third annual investors, employees, customers, government, legal and regulatory stand alone report on the sustainable performance of the John bodies, and society at large. Keells Group. As in previous years, we have engaged Det Norske Veritas AS (DNV) for verification and assurance of this report. Their The boundary of this report extends to 76 companies that come assurance statement is available on pages 128 to 129 of this report. under the sphere of influence of the John Keells Group. They are chosen on the basis that they are legal entities for which the group Contact point for questions regarding the report: remains accountable for, and over which the group exercises direct control. With last year’s report covering 73 companies, a year on year Mr. Suresh Rajendra comparison of performance is possible subject to the explanations Group Sustainability and Risk provided in respect of the mergers, divestments and acquisitions John Keells Holdings PLC that have occurred during the year. 130 Glennie Street Colombo 2 The data measurement techniques and the bases of calculations Sri Lanka including assumptions and techniques underlying estimations Email: [email protected] applied in the compilation of the indicators and other information Website: www.keells.com/sustainability in the report are in accordance with standard industry practices, established rules and the indicator protocols provided under the REPORT SCOPE AND BOUNDARY GRI(G3) Sustainability Reporting Guidelines. Where applicable, This year’s report is at the GRI Application level “B”, the same level of justification for any deviations in any particular case is clearly stated application as maintained last year. For reporting purposes we have in the report. selected 22 GRI performance indicators on the basis of materiality. These indicators cover our Economic, Environmental and Social In terms of restatements, in comparison to the previous year performance during the year under review. A systematic stakeholder 2009/2010, previous year’s and phrases have been re-arranged, engagement process enabled us to select our most significant wherever necessary, to conform to the current year’s presentation; stakeholder groups and prioritise the issues of most concern to namely in the Economic value statement for 2009/2010 carried as these groups. We have determined the relative materiality of these Annex 1 on pages 86 and 87 for the John Keells Holdings PLC issues of concern by utilising a definition of materiality that balances Sustainability Report 2009/2010. stakeholder interests and other external factors, with organisational strategies and objectives. The process of determining materiality
28 John Keells Holdings PLC – Sustainability Report 2010/11 PRECAUTIONARY PRINCIPLE ADDRESSED principals, society, pressure groups and media, and industry peers We are influenced by the precautionary principle in our decision or competitors. making with regard to mitigating the effects of pollution, environmental degradation and global warming. The precautionary Customers approach is acknowledged in the success of our initiatives to reduce Engaging with customers is an opportunity to broaden our our energy consumption and emissions. We strive to incorporate the understanding of our customers’ needs and expectations. By precautionary principle through our risk management processes and evaluating ourselves from a customer perspective, we are able to internal control systems. continually improve our goods and services, and meet if not exceed our customers’ expectations. Triple Bottom Line principles and initiatives endorsed by the Group The Group sustainability policy endorses the triple bottom line Employees principles, which are incorporated in our practices and performance Each employee of the John Keells Group contributes uniquely as a sustainable organisation. We are also a participant in the towards the achievement of the group’s strategic objectives. Our UNGC Initiative and support Sri Lanka’s efforts to achieve of the engagement with our employees has helped maintain a work Millennium Development Goals. Several of our employee policies environment characterised by high performance standards, and practices are modelled on the standards of the International professional development opportunities and rewards, and an Labour Organisation and our group advertising policy follows the organisational culture shaped by respect, honesty and fairness. principles laid down by the ICC Code of Advertising and Marketing Communication Practice. A number of companies in our leisure Community around us sector have obtained ISO 14001, OHSAS 18001 and ISO 22000 Doing the right thing always and building strong relationships based certification, while several other companies in the Group are ISO on openness and trust are corporate values that are embedded certified in their respective categories. We also follow the GRI in our business strategies. Our responsibility towards the people framework to report on our sustainability performance. and communities that exist side by side with our businesses extends beyond strict compliance with the laws and regulations From a corporate governance perspective, we ensure that we meet that govern operations. By monitoring and managing our impacts our regulatory requirements and are compliant with external rules and on surrounding communities, we are able to mitigate the negative codes that include the listing rules of the Colombo Stock Exchange, effects of our operations while maximising positive impacts. The the recommendations of the Combined Code (to the extent John Keells Foundation, our corporate social responsibility arm practicable in the context of our diverse businesses and business further strengthens our community commitment by managing and unit risk profiles) and all provisions of the Code of Governance of the implementing our social and philanthropic programmes to the benefit Institute of Chartered Accountants of Sri Lanka. of surrounding communities.
STAKEHOLDER ENGAGEMENT AT THE JOHN KEELLS GROUP Investors Conducting operations in seven industry sectors in different Our investors’ expectations extend beyond an adequate return on geographical markets necessitates developing and sustaining investment. Investors expect sustainable growth, transparency, relationships with diverse stakeholder groups both internal and accountability and the highest standards of corporate governance. external to the organisation. Our engagement with stakeholders Through statutory reporting, periodic disclosures, and regular encompasses a range of activities and interactions that include contact with investors we provide timely and accurate information communication, consultations and information disclosures. Through that assists investors in their decision making. stakeholder engagement, we are able to identify our most significant stakeholder groups and their specific interests, and determine Government the issues that are most material to our group from an economic, As the country’s leading conglomerate with operations in seven environmental and social sustainability perspective. By integrating industry sectors, we are conscious of our leadership role in reviving the outcomes of stakeholder engagement with the group’s well the economy in Sri Lanka’s post war era. As a corporate partner established risk management processes we are able to assess and committed towards the economic development of our country, address potential risks and align the management of sustainable communication and engagement with the Government is viewed as issues with our business processes and strategies. an opportunity to comment on government policies and deepen our own understanding of the economic and development strategies of Our formal and informal mechanisms of interaction with stakeholders the government. Our participation in policy consultations with the provide opportunity to forge relationships, build mutual trust government helps shape economic policies that are beneficial to and understanding, and provide accountability to people and private sector development. institutions that are affected by or impact our operations. Our most common methods of stakeholder engagement include formal and Legal and Regulatory bodies informal consultations, participation, negotiations, communication, While ensuring compliance with laws and regulations, we also actively mandatory and voluntary disclosures, certification, and accreditation. engage with legal and regulatory bodies to improve understanding of complex regulations and minimise the risk of non-compliance and Stakeholders are persons or groups that have an interest in the potential litigation. organisation, the ability to influence its outcomes or be substantially impacted by the operations of the organisation. They may also Business partners / Principals have a substantial impact on the organisation. Our stakeholders Building strong relationships based on fairness and mutual trust are customers, employees, surrounding communities, investors, with our business partners and principals is crucial to our success. government, legal and regulatory bodies, business partners or By engaging with our partners and principals, we are not only able
John Keells Holdings PLC – Sustainability Report 2010/11 29 to guarantee continuous and stable sources of supply but also be impacted by our businesses. The information gleaned from our communicate our ethical and legal requirements and expectations interactions with these groups, helps us to assess and manage our with regard to sustainable policies and practices throughout the impacts in a responsible and transparent manner. supply chain. Industry peers/Competitors Society/Pressure Groups/Media By interacting with industry peers and competitors at various Engaging with societal groups, civil society organisations, opinion forums and through chambers of commerce, we are able to better leaders and the media helps us understand a wide range of societal understand, evaluate and respond to opportunities and challenges interests and concerns that arise as a result of our operations. Our that arise in a constantly changing and competitive environment. engagement with these groups is particularly useful in building relationships with the less visible sections of society that may still
Stakeholder Stakeholder Current Level of Engagement and Frequency sub-category Customers Individual and Corporate Current level of engagement: (B2B) Personal meetings, discussion forums, surveys, field visits, conference calls, progress reviews, information dissemination through printed reports, telephone, SMS and corporate websites, workshops, business development activities, road shows and trade fairs. Frequency of engagement: • Quarterly through Customer Satisfaction Surveys, • On-going basis through information dissemination through printed reports, telephone, SMS and corporate website • Bi-Annually through personal meetings • Annually through road shows and trade fairs Employees Executives, Non- Current level of engagement: Executives, Directors Direct reporting, intranet communication, employee satisfaction surveys, collective bargaining, open door policy at all management levels, annual events, professional training and development activities, team building activities. Frequency of engagement: • Intranet communications through JK Connect & My Portal on a daily basis • Employee Satisfactions survey such as GPTW (Great Places to Work) conducted annually • Professional training, development activities and team building through internal as well as external sources conducted quarterly
Community Neighbours, Local Current level of engagement: around us Communities, Community Corporate Social Responsibility programmes and activities, community educational and Leaders information dissemination programmes, one-to-one meetings, workshops, forums. Frequency of engagement: Engagement with the community is carried out prior to entry into the community area. After which engagement is carried out on a monthly basis while operating. Community engagement is also carried out on exit. Investors Shareholders, Institutional Current level of engagement: Investors, Fund Managers Periodic disclosures through annual reviews and quarterly reports, one-to-one meetings, and Analysts, Lending investor road shows, phone calls and corporate websites. Institutions, Multilateral Frequency of engagement: Finance Agencies Engagement with the investors is carried out as follows, • Periodic disclosures are carried out annually, • Quarterly reports are carried out on a quarterly basis, • Investor road shows are carried out prior to every undertaken IPO launch • On-going through phone calls and websites Government Government of Sri Lanka, Current level of engagement: Government Departments Meetings, discussions, phone calls, newsletters and circulars, presentations and briefings, and Institutions advisory meetings, membership on national committees, lobbying activities via chambers of commerce. Frequency of engagement: Engagement with the Government is carried out on an on-going basis through newsletters and circulars. The Senior Management are members of Bodies such as the Chamber of Commerce who meet on a monthly basis.
30 John Keells Holdings PLC – Sustainability Report 2010/11 Stakeholder Stakeholder Current Level of Engagement and Frequency sub-category Legal & Local Authorities, Current level of engagement: Regulatory Municipal Councils, Regular meetings, periodic disclosures, correspondence, representation through chambers Bodies Bribery Commission, of commerce and trade associations. Consumer Affairs Frequency of engagement: Authority, Inland Revenue, Engagement with the Legal & Regulatory Bodies is carried out on an on-going basis as Customs Department, the Senior Management are members of Regulatory Bodies such as the Tourist Board and Securities and Exchange Colombo Stock Exchange who meet on a monthly basis. Commission, Colombo Stock Exchange, Tourist Board Business Business Partners, Current level of engagement: Partners / Joint Venture Partners, Regular meetings, distributor conferences, correspondence, monthly market reports, Principals Principals conference calls and e-mails, circulars, membership in industry associations. Frequency of engagement: Engagement with the Business Partners / Principals is carried on, • Monthly basis through monthly market reports, • Annually though distributor conferences, • On-going through conference calls, e-mails and circulars Society / Opinion Leaders, Media, Current level of engagement: Pressure Environmental Groups, Correspondence, website, press releases, media briefings, discussions, participation at Groups / Media NGOs, Voluntary NGO forums, media coverage, certification and accreditation. Organisations Frequency of engagement: Engagement with the Society / Pressure Groups / Media is carried out on an on-going basis through website, press releases and media briefings. Industry Peers / Members of Chambers Current level of engagement: Competitors of Commerce and Trade Communication through membership of chambers of commerce and trade associations, Associations, Competitors conferences, discussion forums. Frequency of engagement: Engagement with the Industry Peers /Competitors is carried out on a monthly basis as the Senior Management who are members of the Chamber of Commerce attends the monthly meetings.
STAKEHOLDER ENGAGEMENT PROCESS engagement and analysis, we have been able to determine our most The process of identifying and selecting the stakeholders of each significant stakeholders, understand our economic, environmental of our business units has required a two pronged approach. We and social impacts and stakeholder influences on our organisation, have utilised both internal and external processes including third and develop responses to issues that are material to our businesses party validation mechanisms to prioritise stakeholder groups and from a sustainability perspective. determine stakeholder interests and concerns. Through stakeholder
John Keells Holdings PLC – Sustainability Report 2010/11 31 In 2009, we undertook an internal stakeholder analysis. We required extensive consultation process. The independent consultants also all operational business units to identify their key stakeholders by conducted an external stakeholder analysis to identify and prioritise prioritising the issues relevant to each stakeholder group on the basis the issues and concerns articulated by stakeholders on the basis of of materiality. Following the guidelines articulated in the AA 1000 materiality. Stakeholder Engagement Standard, we determined the materiality of issues on the basis of impact on short term financial performance The outcomes of both these processes were aligned to sustainability and legal compliance, links to corporate policies and commitments, by linking the most material issues and stakeholder groups to the stakeholder concerns, and relevance to best practices and norms sustainability performance indicators established under the Global established by peers and society. For prioritisation purposes, the Reporting Initiative framework. A mechanism was also established issues identified through this process were ranked according to to monitor, manage and mitigate these issues or risks on a periodic impact and probability of occurrence. The exercise enabled business basis by incorporating these issues into the risk grids of the relevant units to determine material issues critical to their businesses and business units. Utilising the risk management process to manage analyse these issues from a triple bottom line perspective. The material issues also meant that issues not linked to sustainability process also required business units to document their current performance indicators would continue to be managed within the level of engagement with key stakeholders, establish risk control or scope of a business unit’s risk grid. mitigation strategies and plan for future engagement.
We also engaged independent consultants to determine and prioritise stakeholder groups for each business unit through an
Strong
HR4 PR3 PR6 PR9
LA14 SO1 SO2
EN26 HR6 HR7 LA1 LA2 LA4 LA7 LA8 LA10 LA12 EN3 EN4 EN11 EN16 EN21 EN22 EN28 EC1 EC3 EC8
SO3, 2O4 PR1
EXTERNAL ANALYSIS HR1, HR2 SO5, SO8
EN1, EN2, EN12, EN19, HR5 Core indicators continued from 2008-09 EN20, EN27 LA5, LA13 Core indicators selected in 2009-10 EC2, EC4, EC7, EC8 Additional indicators selected in 2010-11 EN8, EN23
EC8
Weak INTERNAL ANALYSIS Strong
While continuing to engage with our stakeholders on a regular basis noted elsewhere in the report, the risk management process is using normal channels of engagement, the emphasis this year documented throughout. has been on the management and review of material issues and risks identified through internal analysis and external stakeholder The flow chart on the facing page depicts the process of stakeholder engagement processes. Through our risk management processes engagement that the John Keells Group used last year to identify we have been able to monitor material issues and focus on the and select stakeholders and determine issues that are material to implementation and effectiveness of risk mitigation strategies. As the Group.
32 John Keells Holdings PLC – Sustainability Report 2010/11 STAKEHOLDER ENGAGEMENT PROCESS
Questionnaire sent to each significant Business Unit
Once feedback is obtained all data were analysed with issues/ stakeholders prioritised as per score
Operational and Sustainability Data collated and reviewed issues absorbed in to by Task Force relevant Risk grids
All issues summarised and linked to GRI aspect/ Indicator Presented to the Group as per relevance Executive Committee and approval obtained
External consultants briefed on stakeholder engagement process with GRI framework
Decisions made at a Group level based on the findings
Stakeholder engagement/ perception analysis carried out by the external consultants
Findings of the stakeholders engagement presented by the Critical sustainability issues external consultants monitored through Risk grid
GRI indicators established for periodic review and analysis
John Keells Holdings PLC – Sustainability Report 2010/11 33 EMPLOYEE STAKEHOLDER ENGAGEMENT significant changes to the material issues that were identified and We consider receiving constant feedback from our employees a linked to GRI (G3) performance indicators during the previous vital process in realising our people vision, “More than just a work reporting year. The indicators selected for the current year on the place”. In January this year we conducted a groupwide employee basis of materiality are summarised in the table on the facing page. survey, with the exception of Union Assurance PLC, for executive and above staff of the entire Group and for non executive employees in certain businesses where the head count is high in January 2010. The response rate received was at a remarkable 90% and this in itself gave credence to the effectiveness of employee engagement strategies used in the group.
“The Great Place to Work – Trust Index” as the tool was used keeping in mind the global benchmarks it provided and the fact that the same survey tool was used in the Group in 2003 and 2005. This intervention involved a survey based on a question and answer methodology and focus group discussions, which were conducted by the survey provider, Great place to work Institute – India.
The GPTW model measures strengths and development areas of an organisation based on five dimensions: Credibility, Respect, Fairness, Pride and Camaraderie. The survey, which was independently administered, resulted in 90 per cent of our employees participating in the survey, a remarkable achievement, which augurs well for the company in that our people consider themselves as partners with one another in making John Keells more than just a work place.
The survey identified Pride for the organisation and management competence and integrity as key strengths and identified as key development areas, equity in compensation, recognition and equal treatment. Post survey several focus group meetings have been held with employees at different levels and in different businesses to understand the reasons for these findings and those findings will now form the basis for action planning to build on the sense of pride and provide opportunities for recognition, bring fairness/equity aspects into focus. The results and findings have been shared with our employees and action planning is currently underway.
The GPTW survey was also undertaken in several businesses where there is a high non executive population such as John Keells Office Automation, Ceylon Cold Stores sales staff, Hotels (Sri Lankan Resorts and City Hotels), DHL and Jaykay Marketing Services (Pvt.) Limited. The key themes that emerged were that the employees take pride in John Keells and their jobs, team work and training they receive whilst improvement is necessary in equity and fair pay and non-restrictive work environment amongst others. Whilst it is noted that the processes that touch the non executive staff, unlike the executive staff, differ from business to business, action planning in these areas will occur at the business level.
Based on the results, currently action planning is underway to build on the strengths and take appropriate steps to address concerns and these plans will be implemented during the year 2011/2012.
KEY TOPICS AND CONCERNS RAISED THROUGH STAKEHOLDER ENGAGEMENT For the current year, the number of sustainability performance indicators selected on the basis of materiality through stakeholder engagement and internal and external analysis stands at 22 indicators. The indicators reported this year are effectively the same as reported in the previous year. Our regular interactions with stakeholders throughout the year and our internal risk reviews and analyses have not yielded any information, which would require
34 John Keells Holdings PLC – Sustainability Report 2010/11 GRI INDICATORS REPORTED FOR 2010/11
GRI Performance Description Indicator Economic performance indicators EC 1 Economic value generated and distributed EC 3 Coverage of the organisation’s defined benefit plan obligations Development and impact of infrastructure investments and services provided primarily for public benefit through EC 8 commercial, in-kind, or pro bono engagement. Environmental performance indicators EN 3 Direct energy consumption by primary energy source EN 4 Indirect energy consumption by primary source Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high EN 11 biodiversity value outside protected areas EN 16 Total direct and indirect greenhouse gas emissions by weight Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with EN 28 environmental laws and regulations Labour practices and decent work performance indicators LA 1 Breakdown of total workforce by employment type, contract and region LA 2 Total number and rate of employee turnover by age group, gender and region LA 4 Percentage of employees covered by collective bargaining agreements LA 7 Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work related fatalities Education, training, counselling, prevention and risk control programs in place to assist workforce members, LA 8 their families or community members regarding serious diseases LA 10 Average hours of training per year per employee by employee category LA 12 Percentage of employees receiving regular performance and career development reviews Human rights performance indicators Operations identified as having significant risk for incidents of child labour, and measures taken to eliminate child HR 6 labour HR 7 Incidents of forced or compulsory labour Society performance indicators Nature, scope and effectiveness of programmes and practices that assess and manage the impacts of SO 1 operations on communities including entering, operating and exiting. SO 2 Percentage and total number of business units analysed for risk related to corruption Product Responsibility performance indicators Type of product and service information required by procedures and percentage of significant products and PR 3 services subject to such information requirements Programmes for adherence to laws, standards and voluntary codes related to marketing communications, PR 6 including advertising, promotion and sponsorship Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and PR 9 use of products and services
Performance indicators EN 17, EN 21 and EN 22, which were may be included in future reporting cycles once the necessary identified as material in the course of stakeholder engagement management, data collection and reporting systems are in place to exercises and analyses conducted in 2009 are not included within enable the organisation to meet reporting requirements. the scope of this report. Performance with regard to these indicators
John Keells Holdings PLC – Sustainability Report 2010/11 35 Triple bottom line Challenges Opportunities Risks Economic • Increasing cost push inflationary • Exploring other sustainable sources • Cost pressures may pressures on the economy / Group and leaner production methods to result in businesses businesses. maintain production/service costs. being unable to • Institutional investors and large • Improved business climate after the manage the set targets investment funds are evaluating end of the war. with regard to the their investments through a • To be a player in the infrastructural sustainability initiatives sustainability lens, driving key development projects. lending decisions. • Improved FDIs into the country • Regulatory framework does not will drive large scale infrastructure compliment the expected pace development and provide a platform envisaged for business growth. for improved business activities. • Intense competition arising out of globalisation and increasing FDIs into Sri Lanka. • Lack of Infrastructural developments to support thrust business sectors. Environment • Managing the objectives of • Greater access to more mature • Increased risk of maximising business returns whilst markets in the region. environmental conforming to growing pressures • Improving and consolidating brand degradation due the prompting the adoption of equity. increased consumption sustainability-driven management • Explore opportunities to improve of energy and greater practices. all product and service related waste emissions. • Increasing legislation and public processes with a view to embracing • Lack of waste recycling policy on businesses regarding cleaner and efficient production and infrastructure resulting sustainable use of resources, service delivery methodology. in greater environmental emissions and waste reduction. • Improving the energy cost base and pollution. • Increasing customer demands for consumption by eliciting employee green products are also proving behavioural change and adopting a powerful force in shaping our greener technologies. business landscape. • Leveraging on the accreditation • Managing the increasing demand bodies such as LEEDS, Green on existing resources with the Globe to enhance the Group improving business climate. competitiveness in the global • Managing and ensuring that the business landscape. links in the Groups supply chain conform to laid down sustainability practices. Social • Employee retention with growing • Impacting the community • The improved business economy resulting in more through the development of rural climate would have employment opportunities. communities to participate in a negative impact • Improved business climate would sustainable sourcing projects and on the community; increase the opportunities for thereby improving their livelihoods. especially in social and possible corruption • Improving employment opportunities cultural aspects, hence for the rural communities, such as increasing the societal computer literacy of rural youth, risk. through the setting up of BPO operations in those areas. • Improving employment opportunities through structured training • Participating in community building projects through the John Keells Foundation, thereby providing opportunities of sustainable livelihood development
36 John Keells Holdings PLC – Sustainability Report 2010/11 SUSTAINABILITY INTEGRATION sector representatives within each Task Force represent the The organisational structure relevant business units belonging to the seven industry sectors of Moving towards sustainability integration through the value chain the group. They coordinate the setting of sustainability goals and requires ownership, responsibility and commitment from every key performance indicators (KPIs) under each sustainability initiative business in the John Keells Group. Under the overall guidance and at the business unit level and act as conduits for communication direction of the Group’s Sustainability Committee, sustainability between the Task Forces and the managers of business units. issues are managed by specialised Task Forces with representation Sector representatives on each Task Force are responsible for from each industry sector. These small but dedicated groups identify planning, implementing and monitoring the action plans and the sustainability issues faced by the John Keells Group, articulate processes required to achieve sustainability goals and KPIs. Sector responses through appropriate strategies and policies, and drive representatives are also charged with the continuous review and implementation in regard to the six sustainability initiatives down management of sustainability related risks identified through the risk to every business unit within the Group’s seven industry sectors. management process. The Task Forces are primarily charged with integrating the group’s sustainability initiatives across each industry sector and business unit. The Group sustainability integration unit provides continuous They have responsibility for selecting the sustainability performance guidance and assistance to the Task Forces and monitors progress indicators on the basis of materiality under the Global Reporting with regard to the integration activities described above. The unit Initiative framework and for designing, improving and implementing is also responsible for aligning sustainability reporting and auditing processes for sustainability data collection and disclosure. The requirements within the integration process.
Integrating Sustainability within the Group’s Value Chain
John Keells Holdings Board
Corporate communication Group Sustainability committee
Social Responsibility Risk Management Foundation Group Sustainability Integration
Task force Sector implementation implementation (Strategic objectives) (Sustainability objectives)
Task force leaders • Identify Stakeholders based on Issues / Risks Policy to Practice • Determine relevance & materiality
Mapping, Control & Review Mapping, Control • Define action / goals / targets Cluster Heads • Review and monitor • Recommend Capex • Share best practice • Risk review Expert Teams / • External / Internal audit Resource Teams
Labour / Occupational Environment Economic Products Society Human Rights Health & Safety & Services
John Keells Holdings PLC – Sustainability Report 2010/11 37 RISK MANAGEMENT in terms of its potential severity and likelihood of occurrence. The Risk management is integral to shaping strategies that ensure the management of risks is a continuous process requiring control group’s sustainable growth and success. The risk management measures and plans to be in place to either eliminate or minimise programme at John Keells ensures that the risks arising from the exposure to identified risks. Accountability is established through the group’s diverse operations are identified and effectively managed nomination of risk owners, who assume responsibility for managing with a view to ultimately protecting and enhancing stakeholder value. and monitoring control measures and plans. Control measures Significant operational, strategic and financial risks, which could include risk mitigation, transfer, avoidance or acceptance strategies, potentially undermine the achievement of the Group’s objectives, are which are based on the risk appetite of the business unit. The risk identified, analysed, assessed and monitored with mitigation actions matrices of all business units are reviewed quarterly and the process established and risk owners appointed as a part of a comprehensive, is documented throughout. The Group Executive Committee reviews well structured and integrated enterprise-wide risk management a business unit’s most significant risks on a biannual basis while programme. audit committees appointed by holding and listed companies review the effectiveness of the risk management programmes of such Business units within the Group identify risk events, which could companies on a regular basis. The risk management process and impact the achievement of strategic objectives using a universal information flow is depicted below. risk register unique to the John Keells Group. Risks are measured according to a formula that requires each risk event to be assessed
John Keells Business External Business Organisation & Analysis & Technology & Risk Universe Strategies & Environment Process People Reporting Data Headline Risks Policies
Layer 4 JKH PLC Audit Committee JK Group Review • • • Risk Report & Group Executive Committee (GEC) Action Sustainability Integration Risk & Control Review Team Risk Management Team
Layer 3
Group Operating Committee (GOC) BU Review & Sector Risk Report & Action Sector Committee Layer 2
BU Risk Report Listed Company Audit Committee & Action Layer 1 Business Unit
SUSTAINABLE RISK MANAGEMENT and addressed through the selection of a relevant indicator found in Sustainable risk management has now become a part of the DNA of the Global Reporting Initiative (GRI) framework. Some of the issues all business units in the Group. It had enabled the group to identify which are not directly addressed by the indicators are monitored and manage risks, harness opportunities, adapt to the changing through the relevant risk matrices. This year all operational business environment and implement long and short term strategies which units have established goals and targets with regard to key issues links with the overall Group objective. relating to their economic, environmental and social performance. The process of setting goals and targets has also helped establish Through integration of the internal risk management process with the underlying implementation strategies, time lines and data the group wide stakeholder engagement process, risk management collection as well as monitoring mechanisms to report on progress. now forms a fundamental aspect of Sustainability. Risk issues identified during Stakeholder engagement process are considered
38 John Keells Holdings PLC – Sustainability Report 2010/11 SUSTAINABILITY PERFORMANCE - 3 YEAR SUMMARY
GRI 2008-(2009) 2009-(2010) 2010-(2011) Indicator Economic performance indicators EC1 Economic value 48,220 (100%) 55,602 (100%) 69,787 (100%) generated (Rs. in million)
Economic value 43,376 (89.95%) 49,966 (89.86%) 61,101 (87.55%) distributed (Rs.’millions)
Economic value retained 4,844 (10.04%) 5,635 (10.13%) 8,686 (12.44%) (Rs.’million) EC3 Coverage of the organisation’s defined benefit plan obligations Employer contributions 64,477 76,680 87,264 to the trust fund Employer contributions 321,375 359,041 426,957 to the provident fund
Employee benefit liability 956,917 1,041,395 1,215,597 as of 31st March
Payments during the 92,960 107,904 70,150 financial year
Environmental performance indicators EN3 Direct energy 379,923 363,479 360,704 consumption by primary source (GJ) EN4 Indirect energy 236,135 246,259 271,065 consumption by primary source (GJ) EN11 Sites near/in high 10 15 14 bio-diversity areas (protected areas) EN16 Total direct and indirect Not required 62,130 65,524 GHG emissions by as per C level weight (MT) reporting
EN28 Fines and sanctions None None None for environmental non compliance
John Keells Holdings PLC – Sustainability Report 2010/11 39 SUSTAINABILITY PERFORMANCE - 3 YEARS SUMMARY
GRI 2008-(2009) 2009-(2010) 2010-(2011) Indicator Social performance indicators: Labour practices and decent work
LA1 Total workforce 9,135 10,675 11,186
LA2 Total number and rate of Not required 17% 36% employee turnover as per C level reporting LA4 Percentage of 29% 18.59% 22.2% employees covered by collective bargaining agreements Social performance indicators: Labour practices and decent work contd. LA7 Injury rate - Not required 238 180 Number of Staff as per C level reporting Occupational diseases Not required 0 0 rate as per C level reporting Lost day rate Not required 0.0263% 0.0588% as per C level reporting Absentee rate Not required 0.5713% 0.7168% as per C level reporting Work related fatalities Not required None 1 as per C level reporting LA8 Education, training, Not required HIV/AIDS awareness HIV/AIDS awareness counselling, programs as per C level programmes: programmes: in place to assist reporting 6,358 people educated 15,078 people educated workforce members, their families, or community
LA10 Average training hours Not required 25 hours per employee 30 hours per employee per year as per C level reporting Non Executive Not required 22 20 as per C level reporting Executive Not required 39 83 as per C level reporting Assistant Manager Not required 9 25 as per C level reporting Manager Not required 8 41 as per C level reporting Assistant Vice President Not required 10 15 and above as per C level reporting
40 John Keells Holdings PLC – Sustainability Report 2010/11 GRI 2008-(2009) 2009-(2010) 2010-(2011) Indicator LA12 Percentage of Not required 100% 100% employees receiving as per C level regular performance reporting and career development reviews Social performance indicators: Human rights HR6 Incidents of child labour Measurement in 15 None progress
HR7 Incidents of forced None None None labour
Social performance indicators: Society
SO1 Programmes/practices 6, 624 persons 10, 130 persons directly 17, 648 persons directly that assess & manage directly impacted impacted impacted impacts of operations on communities, including entering, operating and exiting SO2 Percentage and total 100% 100% 100% number of business units analysed for risk related corruption Social performance indicators: Product responsibility PR3 Type of product information required by procedures, and percentage of significant products subject to such information requirement
Sourcing of components Measurement in progress
22% 38% 62% 78%
Yes No Yes No
Content or substances Measurement in with environmental progress impact 25% 21%
75% 79%
Yes No Yes No
John Keells Holdings PLC – Sustainability Report 2010/11 41 SUSTAINABILITY PERFORMANCE - 3 YEARS SUMMARY contd.
GRI 2008-(2009) 2009-(2010) 2010-(2011) Indicator Safe use of product or Measurement in service progress
25% 26%
75% 74%
Yes No Yes No
Disposal of the product Measurement in progress 8% 16%
92% 84%
Yes No Yes No
PR6 Programmes for • Not • Compliant to International • Compliant to International adherence to laws, required as Chamber of Commerce Chamber of Commerce standards, and per C level Code of Advertising and Code of Advertising and voluntary codes reporting Marketing Communication Marketing Communication related to marketing Practice. Practice. communications, including advertising, • Compliant to procedures • Compliant to procedures promotion, and laid down by the John laid down by the John sponsorship Keells committee on Keells committee on advertising advertising PR9 Monetary value of Not required Rs. 1.5 million None significant fines for as per C level non compliance with reporting rules and regulations concerning the provision and use of products and services
Positive Negative Neutral
42 John Keells Holdings PLC – Sustainability Report 2010/11 KEY CHAPTERS
Economic Performance 44 Environmental Impact 48 More than just a Workplace 62 Ethical Business 68 Health and Safety 72 Our Contribution 76 Product Stewardship 104 ECONOMIC PERFORMANCE
The John Keells Group’s investment philosophy of ‘commitment to delivery and flexibility to change’ has enabled us to become competitive locally and globally. ECONOMIC POLICY The John Keells Group is committed to delivering sustainable economic performance and growth to all its diverse stakeholders.
The John Keells Group in the year 2010/2011 has continued to management approaches effectively by ensuring all our social adhere to its long term goal of achieving sustainable growth in total activities were targeted in the areas that delivered the highest return shareholders return and enhance the quality of the earnings through for our efforts. sound risk management and diversification of earnings stream whilst conducting our business in a sustainable and socially responsible The Group fosters a “pay for performance” culture which has led manner. As in the past, the Group has sought to deliver a strong to increased productivity and better performance, greater employee financial return not only with respect to its shareholders but also recognition and consequently better rewards and the alignment of vis-à-vis all its manifold stakeholders. Over the last few years, John employee, management and stakeholder interests. The Group has Keells Group has been moving towards an active and integrative continuously ensured that it complies with all statutory laws and management and oversight of all three aspects of our business, regulations and that all dues as per these statutory requirements namely economic, social and environmental performance. This are settled within the specified timeframes. It is also committed to includes issues such as pragmatic environmental spending, and purchasing products and services from communities and suppliers measuring the impacts of our social programmes to ensure they are at fair and reasonable prices whilst upholding high standards of targeted to the intended beneficiaries and stakeholders in a cost business ethics and managing social and environmental impacts effective manner. efficiently.
The John Keells Group’s investment philosophy of ‘commitment The financial statements of the Group have been prepared in to delivery and flexibility to change’ has enabled us to become accordance with the provisions of the Companies Act No. 07 of competitive locally and globally. The constant review of portfolios, 2007 of Sri Lanka and presented in compliance with the Sri Lanka emphasis on organic growth and stringent internal controls have Accounting Standards and provides information required by the facilitated in the Group achieving double digit earnings growth over Listing Rules of the Colombo Stock Exchange. the last financial year. All values given in this Economic Performance chapter are in Sri The two-pronged approaches adopted by John Keells Group has Lanka Rupees unless otherwise stated. enabled it to overturn the negatives of the global economic turmoil and maximise the opportunities available in the post-war Sri Lanka. ECONOMIC VALUE STATEMENT The approaches were as follows; The Economic value statement depicts the generation of wealth and its distribution among the stakeholders by acting responsibly in all of 1. Prudent financial management, maintenance of a strong our businesses/ social activities throughout the entire value chain. It balance sheet and careful monitoring of cash flows of Group also reveals the amounts reinvested for the replacement of assets businesses and retained for the growth and development of operations. 2. Effective utilisation of resources and capital The direct economic value generated by the Group increased from In the business environment of rising fuel and commodity prices, Rs.55.60 billion in 2010 to Rs 69.79 billion in 2011. Of this, 68% combined with liquidity constraints, the group was able to leapfrog (2010 – 67%) was expended towards operating costs whilst 12% the competitors with implementation of the above mentioned (2010 – 10%) of the total economic value generated was retained for
John Keells Holdings PLC – Sustainability Report 2010/11 45 ECONOMIC PERFORMANCE
future expansion and strategic investments. Of the remainder, 25% The economic performance of the sectors is described in detail in the (2010 – 28%) was paid to providers of funds; 49% (2010 – 48%) Management Discussion and Analysis section of the annual report was distributed to employees and 23% (2010 – 23%) accrued to the for 2010/11. government by way of taxes.
ECONOMIC VALUE STATEMENT FOR 2010/11
Group Total
For the year ended 31 March 2011 % 2010 % 2009 % Rs’millions Rs’millions Rs’millions
Direct economic value generated Revenue 60,500 86.69 47,980 86.29 41,023 85.07 Interest income 2,748 3.94 2,947 5.30 2,266 4.70 Dividend income 63 0.09 44 0.08 54 0.11 Share of results of associates 2,641 3.78 2,556 4.60 2,340 4.85 Profit on sale of assets & other income 3,367 4.82 2,075 3.73 2,496 5.18 Valuation gain on IP 468 0.68 - - 41 0.09 69,787 100.00 55,602 100.00 48,220 100.00
Economic value distributed Operating costs 47,506 68.07 37,327 67.13 31,202 64.71 Employee wages & benefits 6,873 9.85 6,138 11.04 5,544 11.50 Payments to providers of funds 3,482 4.99 3,565 6.41 3,811 7.90 Payments to government* 3,194 4.58 2,906 5.23 2,781 5.77 Community investments 46 0.07 30 0.05 38 0.08 61,101 87.55 49,966 89.86 43,376 89.95
Economic value retained Depreciation 1,700 2.44 1,737 3.12 1,690 3.50 Amortisation 609 0.87 541 0.97 305 0.63 Profit after dividends 6,377 9.14 3,358 6.04 2,849 5.91 8,686 12.45 5,635 10.14 4,844 10.05
2011 2010 2009 Payment to government by country Rs’millions Rs’millions Rs’millions Sri Lanka 2,690.1 2,220.7 2,146.5 Maldives 492.7 684.7 631.0 India 9.8 0.2 2.7 Other 1.1 0.4 0.8 3,193.7 2,905.9 2,781.0
Refer Annex 1 for detail breakdown of Economic Value Statement
The increase on community investments compared to last year is DEFINED CONTRIBUTION PLAN OBLIGATIONS due to the Group’s focus on investing in new projects whilst the life Employees are eligible for Employees’ Provident Fund (EPF) cycle of certain large community projects are approaching its end. contributions according to the terms of the Employees’ Provident The focus on sustainability and related efforts has increased across Fund Act No. 15 of 1958 and its subsequent amendments and for the group during the reporting year; the costs associated with such Employees’ Trust Fund (ETF) contributions according to the terms of efforts are reflected under separate headings in the books of the the Employees’ Trust Fund Act No. 46 of 1980 and its subsequent head office and the business units. amendments. The companies contribute the relevant percentages
46 John Keells Holdings PLC – Sustainability Report 2010/11 of the eligible gross emoluments of employees to the respective The private provident funds are controlled and administered by Employee Provident Funds and to the Employees’ Trust Fund management committees appointed by the members and governed respectively, both of which are externally funded. by an approved set of rules. The assets of the funds available for investment are invested from time to time in suitable income Subject to the rules of the provident fund, to which such contributions generating instruments keeping in line with the investment limits are made, the group contributes 12-20 per cent as the employer’s prescribed in the guidelines, and the accounts of the funds are contribution and the employees contribute 8-15 per cent to their audited every year. The committees and members meet once a year respective provident funds. The contributions are directly transferred to ratify the financial statements and all members of the funds are on 15th day of every month to the Employees’ Provident Fund, entitled to examine the audited financial statements and the entries managed by the Central Bank of Sri Lanka or to a private provident applicable to them made during the year in the registers. fund maintained by the company. Furthermore, the group also contributes 3 per cent to the Employees’ Trust Fund managed by the Department of Labour.
Rs. 000s 2011 2010 2009 2008
Employer contributions to the trust fund 87,264 76,680 64,477 58,615 Employer contributions to the provident fund 426,957 359,041 321,375 291,618
We also abide by the country regulations for Maldives and India The employee benefit liabilities of listed companies with more than which is inclusive in the figure shown. 100 employees are based on an actuarial valuation. The liabilities of all other companies in the group are based on the gratuity formula DEFINED BENEFIT PLAN OBLIGATIONS specified by Sri Lanka Accounting Standard 16, governing employee Employees are entitled to retirement gratuity, payable under the benefits. Payment of Gratuity Act No. 12 of 1983 and an employee with more than 5 years of service will receive half a months’ salary for every year COMPARATIVE INFORMATION of service on retirement or termination of service. The presentation and classification of the economic value statement of the previous year has been amended, where relevant, for better The liability recognised by the Group in respect of employee benefit presentation and to be comparable with those of the current year. liabilities in the balance sheet is the present value of the defined benefit obligation of the Group at the balance sheet date using the projected unit credit method.
Rs. 000s 2011 2010 2009 2008
Employee benefit liability as at 31 March 1,215,597 1,041,395 956,917 798,600 Payments during the financial year 70,150 107,904 92,960 77,830
John Keells Holdings PLC – Sustainability Report 2010/11 47 ENVIRONMENTAL IMPACT
Minimizing the impact of energy related environmental damage and enhancing the Groups’ competitiveness through energy cost savings by embracing lean energy management practices
- John Keells Group Energy Management Policy ENVIRONMENTAL POLICY The John Keells Group is committed to promoting sound environmental practices within our key businesses, through the establishment of policies and practices that enable us to conduct our operations in a sustainable and environmentally sound manner. We will strive to continuously identify all potential impacts on the environment and manage such impacts whilst using our resources in a sustainable and efficient manner
The John Keells Groups’ environmental policy stems from its We believe that with respect to our environmental policy, the John commitment to responsible citizenship and this chapter deals with the Keells Group leads by example and that our approach to the Groups’ environmental activities. The Group has sought to minimise environment has had a positive impact on manufacturers, suppliers, the Groups’ Carbon Footprint and mitigate any environmental consumers, customers and other related stakeholders. impact caused from its products and services. A comprehensive environmental management system is implemented throughout the Group and we have put much emphasis on energy and biodiversity. Mechanisms are in place to measure the Group carbon footprint; identify actions taken to prevent any environmental impact from our products and services and assess the monetary value of significant fines and the total number of non-monetary sanctions fornon- compliance with applicable environmental laws and regulations.
The John Keells Group steers all its’ companies towards sustainable energy usage and much importance is placed on the efficient use of energy and the use of renewable energy which are key components of sustainable energy. Many of our Group companies are involved in numerous energy saving initiatives and the use of renewable energy in solar water heating and new technologies such as eco- gen systems. Our energy management processes are constantly updated in keeping with the latest technologies and best practices.
During the reporting period, all Group companies continued to adhere to the John Keells Group Biodiversity Conservation Policy and Management Guidelines. Group companies ensured the protection of natural resources, flora and fauna within and adjacent to their premises.
John Keells Holdings PLC – Sustainability Report 2010/11 49 ENVIRONMENTAL IMPACT
TRAINING AND AWARENESS BUILDING Building on the training programs conducted to date on sustainable energy consumption, the Group continues to focus on this area in the year under review. All Business units across the Group continued to reinforce top of mind awareness among the key users and staff in general. These programs were facilitated through intranet postings, poster campaigns and at management meetings. Further energy performance/usage forms a key reporting process across all operating units in the Group. The leisure sector in particular has extended this initiative down the value chain to include customers as well.
ENERGY INITIATIVES CARRIED OUT DURING THE YEAR The initiatives carried out across the Group during the financial year of 2010/11 were primarily under the continuous improvement heading. These include the following;
CONTINUOUS IMPROVEMENT PROGRAMS ACROSS THE GROUP/SECTORS • Installation of energy efficient lighting JOHN KEELLS ENERGY MANAGEMENT POLICY • Upgrading of power management systems such as capacitor The strategic focus on sustainable energy usage continued to drive banks our energy management and conservation efforts during the year • Regulating energy load factors during peak demand periods under review. To this end the Business units have focussed on • Scheduled preventive maintenance programs for all electrical driving continuous improvement programs in all sustainable energy and other equipment management processes across the various businesses with the • Management of Ambient temperatures of HVAC systems objective of optimising usage and improving efficiencies. Leisure Group The Group energy management policy continued to be reinforced • Energy audits carried out in the Resorts in Sri Lanka as well as through these efforts and we are now a step closer in our journey the Maldives to identify areas for improvement towards achieving our goal; • Installing energy efficient LED/CFL lighting on a replacement basis Minimizing the impact of energy related environmental damage • Peak energy consumption is managed by shutting down and enhancing the Groups’ competitiveness through energy costs power in non-critical equipment and guest areas savings by embracing lean energy management practices • Replacing electric water heaters with solar panels heaters • Installing inverter type air conditioners on a replacement basis STRATEGIC SHIFT IN THE MANAGEMENT APPROACH • Improving on good housing keeping practices by ensuring non Although the energy management initiatives were institutionalized critical lighting is switched off across the Group during the year 2009/10, it was felt that the centralized management structure which was put in place previously to drive the roll out across the group was not complimenting the effort as envisaged. To this end, changes were made to the structure so that the ownership and responsibility of the energy initiatives and its achievement clearly sits within each business unit and forms an integral part of their business and review processes. This shift has made a significant difference in focus to the sustainability drive across the Group as there is now involvement at every level within each business sector recognizing the need for sustainable energy usage.
TARGETS AND KEY PERFORMANCE INDICATORS Targets and KPIs that were set up previously across the group was revisited and revised where required during the year under review in the light of the above changes in structure and accountability. Further setting up the required measurement process was a top priority to ensure that above target and KPIs could be monitored. To this end, targets set now reflects both a pragmatic and achievable quantum of measure within the operations of each business and also forms a part of their strategic priorities to be achieved during the year going forward.
50 John Keells Holdings PLC – Sustainability Report 2010/11 Retail Leisure • Conversion of fluorescent light to include electronic ballasts • Installation of Building Management System with an investment • Designing of outlets to maximize on natural lighting with the of Rs. 5.6 million at Cinnamon Lakeside to monitor, control installations of skylights / glass panels and time schedule the equipments in operations with regard • Installation of 40 units of energy efficient island freezers with an to heating, ventilation, air-conditioning, lighting and power investment of Rs. 11.2 million management in order to save energy. • Optimising the lighting cluster to include a limited number of • Using the cool air discharge from the hot water pumps to lights per switch provide air conditioning to staff quarters in the leisure sector • Focussed initiative to monitor usage and accountability through • Recovery of waste heat from air-conditioning units to produce monthly management meetings hot water for guest rooms • Internal energy audits are conducted by the retail area managers for compliance of initiatives rolled out GREEN GLOBE CERTIFICATION • A reward program is in place where 20% of the savings Sri Lankan resorts and city hotels and Chaaya reef Elladhioo in achieved is shared among the respective staff of the outlet. Maldives are registered with the Green Globe certification process, out of which Chaaya Reef Ellaidhoo and Cinnamon Lakeside has Food and Beverage already obtained certification with 76% and 61% compliance • Installation of refrigeration compressors with Variable Speed respectively. After obtaining the intial certification each hotel would Drives (VSD) to control the cooling energy required for the Ice have to demonstrate a continuous improvement in order to retain the Cream Stick Machine certification along with the criteria which would be updated annually • Upgrading the water treatment plant with VSD controlled by Green Globe. Chaaya Reef Ellaidhoo and Cinnamon Lakeside distribution pumps to precisely control the treated water would be audited for recertification under the updated criteria in requirement for the manufacturing line 2012 and they would have to demonstrate a 5% increase in their • Installation of Air compressors with VSD to optimally control compliance rating. the required compressed air for the manufacturing line Green Globe was developed to provide a way forward for tourism Other Sectors organizations who were interested in measuring their environmental • Plantation sector continues to maintain a high level of efficiency impact and then developing and implementing strategies to reduce in indirect energy use by maintaining the VSD systems in good those impacts. Green Globe updates its certification criteria annually working order and by continuous monitoring of the total usage. to ensure international compliance. • The Plantation Sector also encourages the smallholder suppliers to grow fast-growing species of fuel wood such as Why Green Globe? Gliricidia and which in turn is purchased as firewood sticks. • Credibility • Transparency OTHER NEW INITIATIVES CARRIED OUT ACROSS THE GROUP • Lower Operational Costs Real Estate • Better Business • All office relocations during the year were planned to include • Corporate Social Responsibility maximum energy savings through building designs • Better Environmental Performance • Paperless Certification Process Retail sector • Marketing Advantage • Energy audits are being carried out along with an energy • Higher Visibility in the Market management company to identify energy saving opportunities within the outlets. We hope to obtain the certification with an internal target of • Further, in collaboration with the University of Moratuwa the 70 per cent compliance for all our current hotels and have all our new sector is carrying out an initiative to monitor and regulate the properties registered with green globe in order to obtain certification. air conditioning temperature through a process of sensors. This installation would regulate the thermostats to provide the LEED CERTIFICATION required temperature based on the customer population within Leadership in Energy & Environmental Design (LEED) is an the outlet at any given time. internationally recognized green building certification system, providing third-party verification that a building or community was Food & Beverage Manufacturing designed and built using strategies intended to improve performance • The F&B sector has commenced an energy efficiency initiative in metrics such as energy savings, water efficiency, CO2 emissions to reduce the electrical power consumption in chillers with an reduction, improved indoor environmental quality, and stewardship initial investment of Rs. 3 million in order to achieve savings of resources and sensitivity to their impacts. of Rs. 1.4 million per annum in collaboration with an energy management company Chaaya Bey situated in Beruwela is currently registered with the • Evaluating the usage of heat recovery of splash steam from the USGBC and is aiming to obtain the certification or silver level and bottling plants to be used for the manufacturing line to reduce be a LEED certified hotel by year 2013. Five overarching categories the furnace oil consumption in the boilers correspond to the specialties available under the LEED Accredited Professional program out of which our construction falls under “LEED for new construction” in Green Building Design and Construction.
John Keells Holdings PLC – Sustainability Report 2010/11 51 ENVIRONMENTAL IMPACT
THE GROUP ENERGY USAGE Following table shows the John Keells Group’s energy consumption for year 2010-11 compared with the reporting years of 2008-09 and 2009-10.
Unit of Energy Usage Consumption in Giga Joules Description Measure 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 Direct Energy 379,923 363,479 360,704 Fossil fuel 215,718 209,463 192,246 Diesel Liters 5,062,249 4,917,264 4,051,183 153,671 149,270 122,979 Petrol Liters 2,434 8,971 10,330 67 247 284 Furnace Oil Liters 1,477,169 1,365,423 1,518,300 46,791 43,251 48,094 Liquid Petroleum Gas Kg 345,456 379,695 475,084 15,189 16,695 20,889 Renewable Energy 164,205 154,016 168,458 Renewable Energy (Solar ) KwH 227,408 238,771 125,750 819 860 453 Renewable Energy (Bio Mass) Cu M 34,552 32,389 35,529 163,386 153,156 168,005 Indirect Energy - 236,135 246,260 271,065 Electricity From National Grid KwH 65,593,062 68,405,343 75,295,932 - - - Renewable - Hydro KwH 26,237,225 27,362,137 37,647,966 94,454 98,504 135,533 Non Renewable - Thermal KwH 39,355,837 41,043,206 37,647,966 141,681 147,756 135,533 Total Energy Consumption 616,058 609,739 631,769
As indicated in the table above, during the year under review, the total energy consumption of the group has increased by 3.6%.
ENERGY CONSUMPTION BY SECTOR
Energy Consumption by Sector %
IT Sector
Property
Center
Financial Sector Transportation Sector F & B Sector
Leisure Sector
Plantation Sector
0 10 20 30 40 50
2010-2011 2009-2010 2008-2009
52 John Keells Holdings PLC – Sustainability Report 2010/11 The sector wise energy usage analysis as depicted in the above Further, the reopening of Chaaya Blu and closure of Coral Gardens chart shows an increase in the consumption compared to last year for refurbishment also had an impact in the overall energy footprint in the Food & Beverage, Leisure and Plantations sectors. The main of the Leisure sector. reasons for this increase is attributable to increased production volumes in the F&B sector, opening of new Keells Super Outlets, The divestment of Cinnamon Alidhoo, Maldives also had a positive higher occupancy rates experienced in the Leisure sector and impact on the direct energy consumption during the financial year larger production volumes along with unsuitable weather patterns of 2010/11. experienced in the plantation sector respectively.
SAVINGS ACHIEVED FROM ENERGY INITIATIVES ACROSS THE GROUP COMPANIES
Company Details Savings measure
Bentota Beach 1. Energy saving due to replacement of CFL bulbs 1. 139,600 KWH per annum Hotel 2. Use of Solar Power water heating system to provide hot water 2. 5,575 KWH per annum Chaaya Blu 1. Placing CFL bulbs in public areas instead of incandescent 1. 8,300 KWH per annum 2. Use of Gas grill plates instead of Electric plates 2. 20,400 KWH per month Yala Village 1. Electricity saving initiatives 1. Electricity saving of 35,000 • Replacing electric water heaters with solar panels KWH per annum • Introduction of CFL bulbs for all rooms • Training of staff 2. Replacement of old kitchen appliances and training for kitchen staff have reduced the LPG consumption 2. 240 Kg of LPG per month 3. Optimisation of generator usage and proper vehicle scheduling has 3. 600 Litres per month curtailed the fuel consumption Chaaya Village 1. Increase in use of CFL bulbs instead of incandescent 1. 118,700 KWH per annum
Cinnamon Lodge 1. Conversion of incandescent bulbs to CFL 1. 26,400 KWH per annum 2. Installation of Solar panels (6 units) and Ecogens (43 units) 2. 194,400 KWH per annum
Cinnamon 1. Replacing incandescent bulbs with CFL 1. 23,400 KWH per annum Lakeside 2. Building Management System is installed to monitor and control the 2. 75,360 KWH per annum from equipments in relation to heating, ventilation, air-conditioning, lightening Air handling units 205,800 and power management KWH from Exhaust Fans 15,600 from lighting Chaaya Citadel 1. Conversion to CFL from incandescent bulbs 2. Installation of new VSDs 180,000 KWH per annum 2. Solar panels are fixed for heating purposes 4. Regular on the job training and awareness programs Hakura 1. Guest room and pathway lights converted to LED lighting 1. 28,570 kWH per annum 2. Improving the efficiency in sewage treatment plants 3. Awareness campaign among staff Over all 4% reduction energy usage 4. Encouraging guest to reuse bed linens & towels without constantly sending per occupied room night compared for laundry washes to FY 2009/10 Ellaidhoo 1. Energy efficient lighting program initiated by replacing existing bulbs with 1. 37,765 kWH per annum LED lighting to all Water bungalows 2. 28,370 KWH per annum 2. Inculcating guests to reuse bed linens and towels without constantly sending for laundry washes Overall 5% reduction in consumption 3. Awareness poster campaign initiated for employees per occupied room in comparison to FY 2009/10 Dhonveli 1. Reducing linen usage/ washing and educating guest on efficient use 1. 37,000kWh reduction per (reuse) of linens. annum 2. Replacement of old lighting with LED bulbs 3. Awareness campaign among staff (with posters) John Keells Fixing CFL Bulbs 7,000 KWH per annum Logistics Ceylon Cold Replacing chillers in soft drink factory to reduce electricity consumption Estimated annual savings in electricity Stores with an investment of Rs. 3 Million consumption is Rs. 1.4 Million
John Keells Holdings PLC – Sustainability Report 2010/11 53 ENVIRONMENTAL IMPACT
Development (WBCSD). The emission factors have been derived from IPCC Guidelines for National Greenhouse Gas Inventories. For year 2010/2011, our boundary for the emissions measurement has been governed scope 1 and scope 2. Scope 1 is GHG emissions occurring directly from sources that are owned or controlled by our organization whilst scope 2 is indirect emissions generated in the production of electricity consumed.
Electricity – The main constituent of the carbon emissions is generated from electricity sourced from the national grid, contributing approximately 78% of the Groups’ footprint. In comparison to the previous years’ baseline footprint, the electricity component has increased by 10%. This mainly is due to the high occupancy levels in Hotels during FY 2010/11, which has increased the electricity usage. In addition, reopening of Chaaya Blu and closure of Coral Gardens for refurbishment has had an impact in the overall energy consumption of the Leisure sector. Under Consumer Foods and Retail sector, the boost in energy usage is mainly driven by opening of new Keells Super retail outlets and the increase in the production CARBON FOOTPRINT volume at food and beverage manufacturing sectors. In order to Our Carbon Footprint for the year 2010/2011 has been estimated reduce the impact, the Group has implemented a group-wide to be 65,524 MT CO2eq. This constitutes of 14,202 MT of Scope strategy of conserving electricity as well as improving the efficiency 1 direct emissions and 51,322 MT of Scope 2 in-direct emissions. of equipment and buildings, in addition to establishing measurable energy goals & targets. In its commitment towards environmental responsibility, the John Keells Group established its baseline carbon footprint of 62,130 MT Diesel – The second main constituent of the carbon emissions CO2eq last financial year (2009/10). This financial year (2010/11), the is produced from generators which are powered using diesel, carbon footprint has shown an increase of 5% to 65,524 MT CO2eq, contributing approximately 14% of the footprint. Generators are mainly driven by the company growth especially in the Leisure, mainly used as a back up source of power at the companies and Consumer Foods and Retail sectors given the improved business hotels in Sri Lanka, whilst in the Maldivian resorts it is the only source climate in the country. The Group has taken the necessary initiatives of power due to the unavailability of grid power to the islands. In to align itself to optimize emissions generated from operations, comparison to the previous years’ baseline footprint, the diesel processes, products and services, as well as periodically monitor the component has reduced by 18%. This is due to the improvements continuous improvement efforts carried out. This year to further the made by close energy monitoring and increased efficiency of the Group’s commitment towards environmental responsibility, specific generators operated. The divestment of Cinnamon Alidhoo, Maldives internal energy efficiency targets have been established by each has further curtailed the direct energy usage during the financial year business unit. of 2010/11. This has been further complimented by energy saving initiatives such as implementation of EcoGen systems which uses The John Keells Group carbon emissions have been measured heat generated from the air-conditioning for heating of water and using Greenhouse Gas Protocol governed by World Resources other implementations which can be found under Energy Initiatives Institute (WRI) and the World Business Council for Sustainable on pages 50 to 53.
JOHN KEELLS GROUP CARBON FOOTPRINT
Consumption Emission Carbon Footprint (MT Unit of Energy Consumption Description in Tera Factor CO2eq) Measure Usage in Giga Joules Joules (kg/TJ) 2010/2011 2009/2010 Diesel Liters 4,051,183 122,979 123 74,100 9,113 11,061 Petrol Liters 10,330 284 0.28 69,300 20 17 Furnace Oil Liters 1,518,300 48,094 48 78,000 3,751 3,374 LPG Kg 475,084 20,889 21 63,100 1,318 1,053
Scope 1 - Direct Energy 192,246 192 14,202 15,505
54 John Keells Holdings PLC – Sustainability Report 2010/11 Consumption Emission Factor Carbon Footprint ( Description Unit of Measure in KwH in MwH (T CO2eq/MwH) MT CO2eq) 2010/2011 2009/2010 Electricity 75,295,932 75,296 0.6816 51,322 46,625 Scope 2 - In-Direct 75,295,932 75,296 51,322 46,625 Energy
2010/2011 2009/2010 Carbon Footprint (MT CO2eq) 65,524 62,130
*CARBON EMISSION FACTOR SOURCE - IPCC GUIDELINES FOR NATIONAL GREENHOUSE GAS INVENTORIES AND PUBLISHED BY THE INSTITUTE FOR GLOBAL ENVIRONMENTAL STRATEGIES (IGES)
JOHN KEELLS GROUP CARBON FOOTPRINT 65,524 MT CO2eq IN 2010/2011
Diesel
Petrol
Furnace Oil
LPG
Electricity
0 10,000 20,000 30,000 40,000 50,000 60,000 MT CO2eq 2010-2011 2009-2010
John Keells Holdings PLC – Sustainability Report 2010/11 55 ENVIRONMENTAL IMPACT
Carbon Footprint & Revenue Comparison 2010/11 2009/10 Carbon Footprint / MT CO2eq 65,524 62,130 Revenue / Rs. Millions 60,500 47,980 MT CO2eq / Rs. Million 1.08 1.29
Carbon Footprint and Revenue • The Group will share best practices with regard to the comparison conservation of biodiversity within the Group and ensure that all relevant personnel are provided with the skills and knowledge to comply with the biodiversity policy of the Group.
• All Group companies shall monitor emerging issues and keep abreast of regulatory changes, technological innovations 2010/ and stakeholder interests. The Group shall carry out and 2011 support projects that conserve and raise awareness about the importance of maintaining the integrity of essential ecosystems.
• The Group shall continue to work with the government, academia, non-governmental organizations, business 2009/ associations and other interested stakeholders in striving to 2010 develop effective and sustainable legislature and solutions to minimize the impact on the biodiversity in the areas of operations.
GROUP BIODIVERSITY CONSERVATION POLICY 0 0.3 0.6 0.9 1.2 1.5 The Group Biodiversity Conservation Policy reads as follows. MT. CO2eq/Rs. Million “The Group shall seek to conserve, and where possible, enhance biodiversity of the locality through the adherence of local and Governmental laws and the implementation CONSERVATION OF BIODIVERSITY of best practices relating to conservation and protection Sri Lanka is identified as one of the most valuable biodiversity of biodiversity in areas where operations of the Group are hotspots of the world and the John Keells Group, seeks to conserve, carried out. and where possible, enhance the biodiversity of the locality in which its businesses operate in. The Group understands and acknowledges its responsibility in conserving and protecting the biodiversity of the areas it This is done through the implementation of environmental best carries out operations, not only for the purpose of ensuring practices relating to conservation and protection of biodiversity sustainable business, but to take care of the planet and including the adherence to ISO 14001 Environmental Management preserve its diversity, beauty, resources and strength for Systems (which is currently being implemented across selected future generations.” Group companies) and measures taken to ensure adherence to all statutory and Governmental regulations pertaining to the protection MANAGEMENT APPROACH AND CONSERVATION INITIATIVES of fauna and flora and the overall environment. CARRIED OUT In line with the Biodiversity Conservation Policy and Management The following Management Guidelines have been issued to all Guidelines, Group companies operating in close proximity to companies within the Group. biodiversity hot spots and protected areas carried out their annual surveys through the Group’s naturalist team “Nature Trails”, and • All companies including new companies which may be recorded the visible flora and fauna in the premises of each identified acquired merged or formed, and in which the Group exercises group company. This exercise enables us to continuously monitor management control, shall fall within the purview of the Group’s any impact of our operations on the biodiversity of the surrounding biodiversity policy. environment. The annual survey recorded no significant deviations from the flora and fauna recorded in the previous year. • At a minimum, all such Group companies shall comply with all applicable local and governmental legal/ regulatory obligations. While ensuring that the biodiversity of the environment is protected, In the event the Group feels that existing legal requirements the Group also launched various projects and initiatives at various are insufficient to cover the Group’s operations, sound Group companies, with a view to conserving specific species of flora management practices and procedures will be applied to and fauna and to educate staff and the population in the vicinity, of ensure that the biodiversity of the area is protected. the need for cohabitation between humans and nature as a whole.
56 John Keells Holdings PLC – Sustainability Report 2010/11 PROJECT LEOPARD PRIMATE WATCH One such project that was carried out during the year was “Project Another conservation project launched by the Group was Project Leopard” initiated by Yala Village, which is a conservation initiative to “Primate Watch”. safeguard leopards that live outside the safety of the Yala National Park. The “Nature Trails” team of John Keells Hotels Group in collaboration with the MSc Primate Conservation program at Oxford Brookes The project was carried out to create awareness amongst cattle University, in the United Kingdom, successfully conducted ‘The farmers on the behavioural habits of leopards and the need to Primate Watch’, a program aimed at studying the behaviour, safeguard the leopard population in the area. The project entailed environment and ranging patterns of the primates at Cinnamon the construction of steel pens for cattle farmers who previously Lodge Habarana and Chaaya Village Habarana, observing the permitted cattle to roam free at night. During the year Yala Village interactions of these species with the staff and guests and promoting was able to construct and handover three steel pens to farmers and ‘Primate Tourism’.
PIGEON ISLAND CONSERVATION PROJECT Pigeon Island is a haven for snorkelling enthusiasts to observe the rich coral reefs off the Island and is a popular tourist excursion point for many hotels operating in the vicinity.
Like many places of sensitive ecological interest, over visitation is threatening the very survival of its beauty.
The Chaaya Blu and naturalists team joined hands with the Department of Wildlife Conservation in erecting sign boards that advises visitors of behaviour that will destroy the natural beauty of Pigeon Island.Further, the Group’s Nature Odyssey team at Chaaya Blu also sponsored the placement of a line of buoys along the coral reefs at Pigeon Island, which will act as a barrier for speeding boats from damaging the fragile corals that are breathing new life here.
In addition to the above conservation efforts, Group Companies located in environmental sensitive areas, provided training to employees on the value of conservation of the flora and fauna in the vicinity of their location. Furthermore in keeping with the commitment three more are planned to be handed over at the year end. This has to develop team’s professional capabilities, the resident naturalist at enabled farmers to keep their cattle from falling prey to leopards, Chaaya Blu was trained on Open Water Diving. thus potentially reducing the human-leopard conflict. In conforming with the ISO 14000:2004 standards, which require This project has now gathered momentum with a partner company minimal pollution to the environment as far as possible, Walkers Exodus Travel Ltd from Europe also collaborating in the efforts to Tours Ltd obtained ISO 14000:2004 during the last year, becoming provide more steel pens to farmers. the first and only destination management company in Sri Lanka to be certified for both, ISO 9001:2008 Quality Management System The Leopard, which is the star attraction of the Yala National Park, and ISO 14000:2004 Environment Management System. was also recently the subject of interest for the National Geographic Channel, a premier channel owned by Fox Entertainment Group.
A group of cameramen from the National Geographic Channel flew down to Sri Lanka at the height of the drought to capture unseen footage of leopard behavior at night. The project began in July with the Group’s naturalist team, “Nature Trails” being the ground handling managers for this exclusive 47 day Nat Geo shoot. Special permission was sought from the Department of Wildlife to commence shooting within the Yala National Park at night. The observations made by the team have shed much light into the hidden world of the leopard at night, helping to understand the nocturnal habits of leopards.
John Keells Holdings PLC – Sustainability Report 2010/11 57 ENVIRONMENTAL IMPACT
During the year several tree planting campaigns were also carried out among resort hotels, commemorating the World Environment Day and National Tree Planting Day. This was carried out in both Sri Lankan and Maldivian Resort Hotels.
In keeping with the slogan “Refreshingly Sri Lanka - Visit 2011’, Bentota Beach Hotel organized the first program of beach cleaning in Bentota, with the association of Bentota / Beruwela Hoteliers’ Association and Sri Lanka Tourism Development Authority (SLTDA). Employees from all the hotels, beach operators, beach vendors, community, as well as the Private sector, Government and Non- Government Organizations in the area took part in the event.
Celebrating the World Tourism Day on 27th September, Chaaya Village organised a “shramadana” (volunteer work) to remove weeds not edible by elephants in the Minneriya National Wild Life Park. This was at the request made by Wild Life Conservation Authority.
A campaign was also organised by the staff of Chaaya Village to clean the Habarana Lake by clearing all dirt and debris along the species. This 5 acre butterfly garden was setup under the expert boundary of the hotel. guidance of consultant lepidopterist, the renowned Dr. Michael van der Poorten and butterflies numbering over 30 varieties of species As one of the pioneers in organizing whale watching tours in the seas have been observed in the facility. off the southern cost of the country, the Leisure Sector continues to work in collaboration with the Tourist Board and the Department of All Group companies continuously aim to reduce the use of water, Wild Life Conservation in carrying out such operations. The Group energy and production materials used in operations and continuously is represented in a committee setup by the Government to draft work on reducing operational activities that pollute water, land and guidelines to govern whale watching excursions in order to ensure air and create noise levels which have a significant impact on the the conservation and protection of whales and marine life. The biodiversity of the area of operations. “Nature Trails” team of naturalists based at Keells Hotels spearhead this initiative and they were also the first team to re discover the MONETARY VALUE OF SIGNIFICANT FINES AND TOTAL NUMBER lost whales of Trincomalee on the East Coast after the cessation of OF NON-MONETARY SANCTIONS FOR NON-COMPLIANCE hostilities. WITH ENVIRONMENTAL LAWS AND REGULATIONS During the year in review, none of the John Keells Group companies The butterfly garden created by the Group’s naturalists at the were fined or levied monetary or non-monetary sanctions for non- Cinnamon Lodge continues to serve as an ideal habitat for local compliance of environmental laws and regulations in any of the butterflies. The main objective of this project is to conserve and protect countries where operations of the Group took place. such species whilst simultaneously creating awareness about the significance of butterflies in protecting biodiversity amongst guests, The Group identified the companies that would be reported employees and villagers, which in turn would help to protect such under by considering the nature of operations of such companies (Manufacturing, Warehousing, Bunkering and Hotels; and Offices & Retail) and the locality in which such companies are situated in. The locality was classified into the following areas, • City / Urban • Suburban • Rural / Exotic Area / protected area.
Companies whose nature of operations fall within the Manufacturing; and Warehousing, Bunkering & Hotels; and where such companies are located in rural, exotic areas or close to protected areas were identified for reporting. These identified companies are depicted within the highlighted area of the following table.
58 John Keells Holdings PLC – Sustainability Report 2010/11 Hotels, Logistics & Manufacturing Warehousing, Tea Retail Outlets & Offices Factories, Bunkering City & Urban Whittal Boustead Cargo Auxicogent International Lanka Walkers Air Services Areas Lanka Marine Services Auxicogent International Mack Air Cinnamon Grand Auxicogent International USA Mack Air Services Maldives Cinnamon Lakeside Auxicogent Investments Mauritius Mackinnons American Express Quatrro Business Support Travel Services John Keells Air Services India Infomate Mackinnon Mackenzie & Co Information System Associates Ceylon John Keells Computer Services John Keells Logistics India UK Mackinnon Mackenzie Shipping John Keells Computer Services Keells Shipping John Keells Software JK Packaging Technologies Ceylon Cold Stores - Head Office John Keells Office Automation Keells Food India John Keells Keells Food Products Mauritius John Keells Tea JayKay Marketing Services John Keells Properties Nexus Networks Keells Realtors John Keells Stock Brokers Whittal Boustead Real Estate Union Assurance Crescat Boulevard Walkers Tours John Keells Holdings Whittal Boustead Travel John Keells International Serene Holidays John Keells Singapore John Keells Hotels Keells Consultants Keells Hotels Management Mackinnons Keells Financial Services Services John Keells Hotels Mauritius Mortlake Auxicogent Alpha John Keells Holdings Mauritius Auxicogent Holdings Facets Suburban Ceylon Cold Stores - John Keells Logistics Areas Factory John Keells Logistics Lanka Keells Food Products Transware Logistics Rural Areas / Coral Gardens Hotel Exotic Areas Bentotal Beach Hotel / Close to Cinnamon Lodge Protected Chaaya Village Areas Hotel Bayroo (Land only) Chaaya Citadel Rajawella Hotels Chaaya Blu John Keells Warehousing Wirawila Walk Inn (Land only) Yala Village Hotel Hakuraa Huraa Maldives Hotel Alidhoo Maldives Hotel Ellaidhoo Maldives Hotel Dhonveli Maldives Tea Small Holder Factories
John Keells Holdings PLC – Sustainability Report 2010/11 59 ENVIRONMENTAL IMPACT
Subsurface / Geographic Type of Size of Site in Size of Site in Company underground land Location Operation Acres Km2 utilised John Keells Warehousing Muthurajawela Nil Tea Warehouse 6.00 0.0243 John Keells Group Hotels Chaaya Village Habarana Nil Hotel 9.34 0.0378 Cinnamon Lodge Habarana Nil Hotel 25.47 0.1031 Chaaya Citadel Kandy Nil Hotel 5.79 0.0234 Bentota Beach Hotel Bentota Nil Hotel 11.02 0.0446 ChaayaBlu Trincomalee Nil Hotel 28.24 0.1143 Basement of Hotel (under Coral Gardens Hotel Hikkaduwa 4.36 0.0176 3600square meters construction)
Yala Village Yala Nil Hotel 10.00 0.0405
Meemu Atoll Chaaya Lagoon HakuraaHuraa Nil Hotel 13.42 0.0543 Republic of Maldives North Male Atoll Chaaya Island Dhonveli Nil Hotel 36.96 0.1496 Republic of Maldives North Ari Atoll Chaaya Reef Ellaidhoo Nil Hotel 13.75 0.0556 Republic of Maldives
LOCATIONS IN THE MALDIVES
North Male’ Atoll
Chaaya Reef Ellaidhoo HP Ref Male North Ari Atoll Chaaya Island Dhonveli Protected Marine Areas Maaya Thila Fish Head Chaaya resorts Hakuraa Thila Meemu Atoll Chaaya lagoon HakuraaHuraa
60 John Keells Holdings PLC – Sustainability Report 2010/11 LOCATIONS IN SRI LANKA
The locations highlighted in the table before, and their proximity to Biodiversity Hotspots and protected areas are depicted below.
Chundikulam Bird Sanctuary
Kokilai Bird Sanctuary Madhu& Giants Tank Sanctuary
ChaayaBlu Hotels Naval Headworks Sanctuary Warehouses SomawathieChaitya Sanctuary Wilpattu National Park Sanctuaries/National Parks/ Nature/Forest Reserves Ritigala Strict Natural Reserve Minneriya Tank Sanctuary Cinnamon Lodge & Chaaya Village
Wasgamuwa Strict Natural Reserve
Maduru Oya National Park
Chaaya Citadel Rantambe Reservoir Sanctuary The Tamarind Tree John Keells Tea Warehouse Gal Oya National Park Muthurajawela Wetlands/Marsh Peak Wilderness Sanctuary
UdaWalawe National Park
Yala National Park Sinharaja Rainforest Reserve Yala Village Hotel Bentota Beach Hotel Bundala Bird Sanctuary KannEliya Forest Reserve Coral Gardens Hotel
John Keells Holdings PLC – Sustainability Report 2010/11 61 MORE THAN JUST A WORKPLACE
Our achievements are the sigma of our people’s achievements and we believe that the future of the John Keells Group is closely linked to the future of our people. At John Keells we believe that our employees are a critical factor in TALENT ACQUISITION achieving superior results. Employees are one of the key pillars of Talent attraction, motivation and retention are the prime focus at strength upon which our endeavors and success rest. In this context John Keells. To augment our talent acquisition we apply multiple we endeavour to foster a work environment that is equitable and branding strategies which concentrate on external and internal talent participative. We also see our employees’ personal progression in attraction, growth and retention. This year our head count has grown their journey with the Group as a vital component in achieving results by 5% in comparison to the last reporting year (2009/2010). and constitutes most often than not the edge we will have in the market place. Trust and feeling of belonging are key to our employees who are an integral part of the fast growth phase we see for John Keells. Our human resource policies, practices and guidelines together with To achieve this we have established transparent and proactive human resource structures established in every business unit of the employee engagement programmes, given ample opportunities for Group allow an approach to achieve our people vision “More than career growth, and empowered employees for fast decision making, just a workplace”. The integrated ERP system, SAP HR acts as a with accountability and measurement. strategic tool in driving performance through people throughout the Group enabling prompt decision making with utmost transparency.
Employee number by category
Sustainability Reporting AVP & Total Head Mgr AM Exe Non.Exe Above Count
Consumer Food & Retail 15 62 99 231 2,622 3,029 Transport 10 26 26 172 135 369 Leisure 26 47 68 519 3,798 4,459 Information Technology 13 52 82 709 123 979 Other Centre Functions 21 21 23 43 19 127 Property 5 10 15 19 50 99 Plantations 7 22 7 41 926 1,003 Financial Services 19 196 176 366 364 1,121
TOTAL 116 436 496 2,100 8,037 11,186 1.0% 3.9% 4.4% 18.8% 71.8%
John Keells Holdings PLC – Sustainability Report 2010/11 63 MORE THAN JUST A WORKPLACE
All employees of the Group are generally governed by a contract of employment. The Group has maintained the gender breakdown equivalent to that of last year. When considering the Group’s composition of industries this reflects the industry and country norms. The Leisure and the Consumer Food & Retail groups due to the nature of their respective industries and businesses account for 33 per cent of the Group’s contract employee base. Employee numbers set out in the chart comprise full time employees as per the relevant national legislation. 10 per cent of the total population is employed in overseas subsidiaries mainly from the Leisure and Information Technology sectors. However, this amount has reduced by 1 per cent due to the divestment of Cinnamon Island Alidhoo (Maldives)
TOTAL WORK FORCE 11,186
Employee Attrition Analysis The attrition percentage has been reported taking into consideration employee type. The reason for such differentiation is based on the EMPLOYEE POPULATION BY different strategies the Group uses to reduce or maintain the said attrition percentage as appropriate for such businesses. Gender The permanent employee attrition percentage is at 24 per cent of which 9 per cent is from the Business Process Outsourcing (BPO) arm of the Group located in India. It is to be noted that high attrition 22% in this industry is a norm. Likewise 6 per cent is contributed from Tea Smallholder Factories PLC at the level of factory employees. This percentage is considerably low when compared with similar 78% businesses. The Group’s permanent employee attrition rate is a single digit - 8 per cent.
The model used in the Retail Sector is to offer employment to youth Male Female of the rural areas of the country and offer them training in the retail industry and deploy them to the market with the end objective of Type making these youth more employable. This model fits well with the global pattern of students and part timers doing retail specific jobs, where the business expects a high rate of attrition. These employees together with the Leisure Group employees constitute a majority of 33% the contract staff and the high attrition percentage of 71 per cent is attributed to these two areas of business. These are planned and expected attrition in the operating models of these businesses. 67% Business units of the Information and Technology sector have introduced performance based schemes to reduce employee attrition whilst the Retail sector has introduced monetary schemes in the first few months of employment as a means of assisting employees. Contract Permanent
Attrition by Gender Region
10% 28%
72% 90%
Male Female Local Foreign
64 John Keells Holdings PLC – Sustainability Report 2010/11 Attrition by Age Training Hours
10% Non Exe
Exe 90% AM
Contract Permanent Mgr
AVP & Above Attrition by Region 0 20 40 60 80 100
3%
97%
Foreign Local
An age wise analysis of attrition has seen an improvement compared to last year in the age category 30-50. In the over 50 years age category, attrition has remained static. In the less than 30 years of age category attrition is seen in the sectors of Retail and BPO owing to the high number of employees within this age group who are part of their total employee population.
97 per cent of the Group’s total attrition is from the local operations and attrition from the Foreign operations is 3 per cent of the total attrition. This is in proportion to the 90 per cent of the total Group staff School, a first in Sri Lanka to facilitate in these areas of training for the employed locally. Group. Within a short span of 5 months evaluations, customisation and offering of 300 hours of training on-line was offered to group LEARNING AND DEVELOPMENT Manager level employees of the Group. The knowledge platform The John Keells Group continuously invests in improving employees’ is built and designed in such detail that the participant could use skill capacities to enable them to be ready for challenging the content and refer it to ensure day to day operational excellence opportunities and thereby strive for superior performance. The over a period of time. This we believe is truly a continuous source Group’s employees have spent a total of 336,400 hours of training; of knowledge. For the coming years we have optimised plans of this is a 32 per cent increase in comparison to last year’s training using this tool extensively to achieve a majority of our development hours. 30 hours on average has been spent by an employee on offering to our employees. Planned programmes in the pipe-line learning and development activities. These include business focus are, the Manager Development Programme and the Leadership training, capability building, induction, development interventions Development Programme (AVP/ VP) which will be delivering a total carried out for employees to take up potential roles. More robust 1,100 on-line training hours in these categories. training hours capturing mechanisms will be introduced at non executive levels in the coming year to ensure all training done are In relation to capability development we hope to use the E-Learning captured accurately. platform to reach 1,000 executive and above level employees over a period of 12 months. Stepping up from conventional instructor based training delivery methods, we brought in a combination of class room and For middle management levels a customised programme will be E-learning platforms to the Group. A rigorous process of evaluation offered taking into consideration the expected level of competency and customisation of E-Learning tools were carried out prior to and the technical skills required. This would be an 80 hour programme implementation. We partnered with Harvard Business Publishing in per participant and will be a repetitive development item every year in India which is the corporate learning arm of the Harvard Business the training calendar.
John Keells Holdings PLC – Sustainability Report 2010/11 65 MORE THAN JUST A WORKPLACE
LEISURE GROUP LABOUR INITIATIVES With Sri Lanka on the verge of transcending all other destinations to be THE most sought after tourism destination in the region, John Keells Hotels the largest hotelier in Sri Lanka has set the trend to ride the wave of the tourism boom and strived to create a new and exciting experience for the travellers who patronise John Keells Hotels.
John Keells Hotels embraced the “Future” by launching its new vision “We Will Always Be The Hospitality Trendsetter” and the five pledges for the Leisure Group in November 2010. The new vision and the pledges were introduced to the associates at a gala event, which also emphasised on the exciting future that lay ahead for the Group.
Living by the new vision of being the “Hospitality Trendsetter”, the John Keells Leisure Group embarked on a series of Human Resource interventions, where some of which were first of its kind in the Sri Lankan hospitality arena.
Human Resources development was identified as the key in meeting the demands of the global travellers and with this view, the A new competency framework was developed to support the new John Keells Leisure Group tied up with the Emirates Academy of vision and pledges of the Leisure group which will sit along with Hospitality Management (EAHM) of the Jumeirah Group, which has the John Keells Group Competency framework. Currently the John an academic association with Ecole hôtelière De Lausanne (EHL), Keells Group competencies are aimed at the executives and above Switzerland the oldest hotel school in the world. level, and the Leisure group has taken a step further by developing competencies even to the associate levels and are intending to roll The John Keells Leisure Group entered into a memorandum of out the new competencies within the next financial year. understanding with EAHM for a three year period to develop the skills and competencies of the associates and to standardise selected As part of the ongoing human resources initiatives in the Leisure processes to be aligned towards the new vision. group, a three year plan has been formulated in line with “Building People, Systems, Processes and capabilities”, which will be rolled As the first phase the company selected 278 associates across all out in the next three years. levels and sent them on a “Mind Opener” programme to Dubai at the Emirates Academy of Hospitality Management, where they were The Leisure group is planning to conduct employee surveys on an taken through a combination of classroom training on their area of annual basis, with the view of making the John Keells Leisure Group specialisation, plus a study tour/exposure in the some of the top class the most preferred employer. hotels in Dubai such as Burj Al-Arab, Atlantis and Hyatt Regency etc. The 360 degree feedback process was introduced to Manager and Specific programmes such as Butler Service, Wine & Spirits Assistant Manager levels this year. This was originally done for the Appreciation and Sales & Reservations were also conducted in Sri Assistant Vice Presidents and above level in the John Keells Group. Lanka and Maldives by a panel of lecturers from EAHM to selected executives and associates. The merits of the Learning Management and Talent Management Modules in the SAP system will be reviewed and incorporated to the A team of professionals from EAHM under took a comprehensive current system. study on the current “Standard Operating Procedures (SOP’s)” practiced in the JKH hotels and re-defined some of the SOP’s to be The access to Information Technology was identified as a key aligned towards the new vision and the pledges, and lesson plans element in the “future” journey and the Leisure group has taken a were developed accordingly. major stride in developing the IT skills of all the associates. As a first phase the group has launched the Leisure Portal, where Kiosks were A four day workshop was held for the Master Trainers of the Leisure made available in each business unit to enable the associates to view hotels by EAHM in order to develop their train-the-trainer skills to group news, share ideas & information and update their knowledge develop departmental trainers (TAD). They were trained on designing on the current affairs, with free access to internet. & delivering effective and interactive training sessions to groups of people, adult learning techniques, linking the training to organisation’s Further the company is intending to bring in the e-learning platform goals, measuring the effectiveness of training, etc. into the portal, where the e-learning materials and online programmes will be made available for the associates for flexible learning. Further a group of TAD trainers comprising of executive as well as associate level staff were identified from each business unit through We consider receiving constant feedback from our employees a vital a rigorous evaluation process based on their competencies and process in realising our people vision, “More than just a work place”. ability to train people, and they will be trained by the Master Trainers This year we conducted a Group-wide employee survey for executive to take leadership roles in rolling out the SOP’s as per the lesson and above staff of the entire Group and for non executive employees plans to all associates and thereby delivering the brand promises. in certain businesses where the head count is high in January 2010. The response rate received was at a remarkable 90% and this in
66 John Keells Holdings PLC – Sustainability Report 2010/11 itself gave credence to the effectiveness of employee engagement strategies used within the group.
“The Great Place to Work – Trust Index” was the tool used keeping in mind the global benchmarks it provided and the fact that the same survey tool was used in the group in 2003 and 2005. This intervention involved a survey based on a question and answer methodology and focus group discussions, which were conducted by the survey provider, Great Place to Work Institute – India. Based on the results, currently action planning is underway to build on the strengths and take appropriate steps to address concerns and these plans will be implemented during the year 2011/2012.
and the youngest at every level from Executive level upwards every 2 months. Similar Young Forums at a Sector level with the President and Executive Vice Presidents, “JK Connect” which is an E-communication channel, open door policy and skip level meetings are also a few other strategies adopted within the Group.
Our policy on freedom of association and collective bargaining allows formal and informal types of collective bargaining within the Group.
We strongly believe in the concept of all supervisors “socialising” performance management and interacting with their colleagues and direct reports with regards to performance, grievance resolution, and motivation and building relationships. Towards enabling this interaction we have institutionalised certain frameworks, COLLECTIVE BARGAINING AND FREEDOM OF ASSOCIATION encouraging informality at all times. Whilst employees do receive constant feedback during the year, formal feedback will be given at two intervals in the year at midyear and at the year end appraisal. The Employees covered by collective bargaining imperatives to be addressed in these sessions will be performance; Total number of Employees 11,186 behavioral competencies, career aspirations and development needs. All of our employees are governed by this process. Consumer Food and Retail 1,466
Leisure 115 At certain non executive levels, where they are governed by a collective Plantation Services 912 agreement, a formal process of performance appraisal will not take place. However depending on their role efficiency, productivity 22.20% related feedback will be given. Mentoring of our employees happen as a part of the performance management system and a person from Formal and informal types of collective bargaining are prevalent in the the highest leadership levels mentor employees to enhance their Group. Formal collective agreements are found only in the Consumer effectiveness, preparing them for roles at John Keells and making Foods sector and John Keells PLC of the Plantation Services sector. them ready for future roles. The Tea Small Holder Factories in the Plantation Services Sector is not a signatory of a collective agreement but the company follows the Our achievements are the sigma of our people’s achievements and same structure governing the plantation industry of Sri Lanka with we believe that the future of the John Keells Group is closely linked regards to terms and conditions of employment. “Joint Consultancy to the future of our people. Committees”, “Welfare Committees”, “Business Improvement Committees”, and “Junior Operating Committees” namely are forums which are prevalent within these businesses. These forums ensure enhanced communication, encourage improvements to systems practices at all levels and is a constant enabler of employee engagement.
The Group has, over the years, implemented many enablers to encourage employee engagement within the group. Young forums are held with the Chairman and the Executive Directors
John Keells Holdings PLC – Sustainability Report 2010/11 67 ETHICAL BUSINESS
The John Keells Group conducts business in accordance with the highest ethical standards and in compliance with the letter and spirit of applicable laws in countries where we operate. POLICY ON CHILD LABOUR The John Keells Group does not engage children in employment. As a general practice, the Group does not employ any person below the age of 18 (eighteen) years at the workplace.
A strong commitment to upholding the universal human rights of all multiple controls are in place to ensure strict compliance by labour individuals has been inherent in the John Keells Group throughout suppliers. So far, no case of non-conformity has been detected. its existence. We have imbued the values of “doing the right things, always”, “fostering a great place to work” and “building strong Meanwhile, steps were taken during the year under review to address relationships based on openness and trust” by ensuring that through the issue of employment of young workers by a few companies of the our actions we demonstrate our commitment and respect for all our group as disclosed in the 2009/10 Report. Accordingly, in keeping stakeholders. This commitment has translated into the management with the Group policy on child labour: systems and processes which govern our businesses. • Jaykay Marketing Services (Private) Limited (JMSL), the operator of the Keells supermarket chain, which stopped CHILD LABOUR recruiting any new staff below the age of 18 from 1st May The John Keells Group’s standard on the minimum age for admission 2009, had only 15 trainees who were below 18 years of age to employment is more stringent than the applicable statutory as at 31st March 2010, and by October 2010, all 15 of them definitions as well as the ILO conventions. were 18 years or more. Whilst HR departments have been conducting audits to ensure adherence to this policy of non The Human Rights Task Force worked on consolidating the process recruitment, strict instructions were given to Outlet Managers of institutionalising the John Keells Group policy on child labour by to adhere to requirements pertaining to the employment of assisting the Group’s business units in identifying the respective young workers as per applicable law, until such time as the goals and targets and advising respective sector representatives said trainees turned 18. on potential issues, whilst continuing to monitor progress through • It has been verified that the Leisure group also does not employ systematic reporting processes verified through a quarterly any person below the age of 18 years. The trainees who are compliance checklist. engaged by some of the resorts managed by John Keells in the Maldives who are below the age of 18 and attached to the The above processes confirmed that the risk of child labour is very John Keells School of Hospitality in the Maldives fall within the remote at the John Keells Group. Companies within the Group already scope of interns with the duration of such internship lasting no have in place best practices relating to observing and verifying the more than a maximum of three months. minimum age of employment and no case of non-conformity has been detected so far. The processes relating to recruitment and During the year under review, the following issue was also noted: selection require verification of age with reference to the original birth • Tea Smallholder Factories PLC, in one of its operational units, certificate and National Identity Card of the employee and, in certain employed five young workers in the age category 16 to18 cases, school leaving certificate as well as maintaining copies of years during the season on casual basis, necessitated by the same in the personal file. In addition, in the Consumer Foods Sector, extreme shortage of workers. These workers were employed where outsourced labour is engaged in certain instances such as to subject to the policy guidelines given by the Employers’ meet seasonal requirements or cover absenteeism of company staff, Federation of Ceylon on employment of persons in the said age
John Keells Holdings PLC – Sustainability Report 2010/11 69 ETHICAL BUSINESS
category. Three of the five employees will reach the age of 18 the Employers’ Federation of Ceylon (EFC) as an industry practice years during the course of 2011 and the other two in January which requires an amendment to the Shop and Office Employees 2012. Act. EFC has in turn been lobbying this issue with the Ministry of Labour and Labour Relations over time. A written representation FORCED OR COMPULSORY LABOUR has been made in regard to the need to the Minister by the EFC stating that reforms are imperative for the country to compete in the international markets and remain competitive and that the existing restriction under the Shop and Office Employees Act is Policy on forced or counterproductive, especially where females constitute a substantial portion of the majority in the service sector. A decision in this regard compulsory labour is pending at date of this report.
No employee of the John Keells Group As regards to training, especially where the training cost is significant, companies within the Group also ensure that employees are required is made to work against his/her will, or to understand and agree that they will work an adequate duration subjected to corporal punishment or which would not exceed the value of the training. coercion of any type related to work. Employees who work beyond normal hours are compensated by means of overtime or variable pay payments as appropriate and are also supported with meals and transport facilities in compliance with During the year under review, the Human Rights task force also applicable laws and industry best practices. worked on consolidating the process of institutionalising the John Keells Group policy on forced or compulsory labour by assisting NON-DISCRIMINATION the Group’s business units in identifying the respective goals and targets and advising respective Sector representatives on potential issues. The task force also developed a checklist to guide the Policy on equal Group’s business units in responding to the questionnaire on forced or compulsory labour (adapted from the ILO’s handbook for Employers & Business), whilst continuing to monitor progress opportunities through systematic reporting processes verified through a quarterly compliance checklist. The John Keells Group is an equal
The processes confirmed that the risk of forced or compulsory opportunity employer. Accordingly, the labour is insignificant at the John Keells Group and its subsidiary group is committed to hiring, developing companies. So far, no case of non-conformity has been detected in companies within the Group except the following. and promoting individuals who best meet the requirements of available positions, Working hours of female employees of JMSL attached to possess the required competencies, supermarkets can extend upto 11 p.m. (which is beyond the statutory limit of 10 p.m.) consonant with an industry practice prevalent in experience and qualifications to carry out Sri Lanka. The supermarket retailing industry has raised this issue via assigned tasks and have the potential for growth within the organisation; and has put in processes and systems that ensure the same.
In keeping with its policy on equal opportunities for all, the Group is committed to maintaining workplaces that are free from physical or verbal harassment or discrimination on the basis of race, religion, gender, age, nationality, social origin, disability, political affiliation or opinion. John Keells Holdings PLC is a member of the Employer Network on Disability of the Employers’ Federation of Ceylon and as such, promotes the employment of differently abled persons within the Group. The Group also has a comprehensive process in place regarding the prevention of sexual harassment. During the year under review, the Group’s policy on Ombudsperson was revised to provide employees the choice of referring a matter relating to sexual harassment either to the Ombudsperson or to the internal committee appointed for the purpose in the first instance.
70 John Keells Holdings PLC – Sustainability Report 2010/11 Meanwhile, the Group policy on equal opportunity was also • All companies and functions have a process to prevent / in operation via continued use of related texts in corporate reduce the risk of corruption e.g. procurement process, advertisements as well as forms used in the recruitment process authority levels as per the group operating model which draw attention to the relevant Group policies. During the year (February 2005), reporting requirements etc. under review, the Group also adopted and disseminated a guideline • All business units carry out a risk evaluation matrix for on recruitment of differently-abled individuals. their business in the form of a risk matrix.
ANTI-CORRUPTION Corruption is included as a specific section in the risk grid Management approach and guidelines for corruption The John Keells Group conducts business in accordance with the 3. Evaluate highest ethical standards and in compliance with the letter and spirit The above stated policies and their implementation and review, of applicable laws in countries where we operate. are taken up formally on a regular basis at sector committee meetings or group management committee meetings as relevant. In addition independent internal audit reviews are undertaken to ensure compliance with the processes. The Anti-corruption Policy findings of these committees are documented for analysis.
The John Keells Group places the When considering the current reporting boundaries of 73 highest value on ethical practices and companies, it is evident that these companies are analysed for risk resulting from the conduct of employees and further has promulgated a zero tolerance policy subjected to independent audit reviews. Therefore, the group is towards corruption and bribery in all its 100% compliant when considering the percentage of business transactions units analysed for risk related corruption. Through our transparent and fair practices in all our dealings The Group upholds the distinction of being identified by its peers as we have been able to establish mutually beneficial relations Sri Lanka’s most respected entity for the fifth consecutive year, in with our suppliers, customers and business partners. Through the annual nationwide survey, conducted by ‘Lanka Monthly Digest’ our communication and practices we strive to encourage our (LMD). partners to adhere to business principles.
The Group has also defined a three-pronged approach which further mandates the policy through a transparent control and prevention mechanism:
1. Educate The John Keells Code of Conduct for executives encompasses rules regarding bribery and corruption and is circulated to all executives at the time of their induction. Each employee signs off on his/her Letter of Appointment which refers to compliance at all times with the rules, regulations, policies and procedures that shall be in force. Code of Conduct and the JK value statement is available on the JK portal and it is flashed on the home page of the employee portal every Monday as a reminder. Compliance with this code forms part of the John Keells values and furthermore, each employee is assessed bi- annually on whether he/she embraces these values. This is an integral part of the employees Performance Appraisal and evaluation which is considered for their Compensation and Benefits as well as career development. Non conformity to the code of conduct would lead to disciplinary action and could even involve dismissal.
2. Enforce • The group expects and encourages employees to bring to attention any breach of the code and it is guaranteed that no employee would suffer as a consequence of reporting such a breach. • A multi-channel formal process of communication has been established. This includes chairman direct, BU specific grievance handling process, Ombudsmen service and a sexual harassment committee.
John Keells Holdings PLC – Sustainability Report 2010/11 71 HEALTH AND SAFETY
Numerous awareness programs were conducted ensuring that employees adhere to adopted safe practices at the workplace, thereby making the John Keells Group a safe place to work. POLICY ON HEALTH AND SAFETY Through practices which are on par with international standards, we strive to provide a feeling of safety to our employees, customers and visitors who are involved in any business or transaction with the John Keells Group.
From an Occupational Health and Safety (OHS) perspective, the John In addition to the programmes conducted by the respective business Keells Group in its quest to be a ‘sustainable’ organisation, began units, the Group Occupational Health & Safety Task Force, keeping in the initiative to be a more OHS friendly organisation by dividing the mind its objective of obtaining the OHSAS certification for all Group group companies under seven major categories: companies other than those operating in an office and IT environment, • Transportation organised a training programme for the sector and business unit • Office / IT representatives on how to carry out a gap analysis to determine the • Property / Construction current position and arrive at the improvements required to obtain • Warehousing the OHSAS certification. This programme was conducted by a lead • Hotels auditor of one of the leading OHSAS certification audit firms in the • Retail country. • Factory The following group companies possess the OHSAS certification: Now into the third year, the Group is maturing in the process of being • Cinnamon Grand Colombo ‘sustainable’ and drastic improvements were witnessed throughout • Chaaya Village Habarana all business units towards monitoring and eliminating hazards in • Chaaya Citadel Kandy the working environment. Numerous awareness programmes • Bentota Beach Hotel were conducted ensuring that employees adhere to adopted safe • Chaaya Lagoon Hakuraa Huraa (Maldives) practices at the workplace, thereby making the John Keells Group a • Chaaya Island Dhonveli (Maldives) safe place to work. • Chaaya Reef Ellaidhoo (Maldives) • John Keells Logistics (Pvt.) Limited This was also evident in the recently concluded employee survey conducted for the entire John Keells Group by ‘Great Place To Currently group companies are in the process of formulating sub Work’ where the Group was considered a ‘Safe Place to Work’ by a policies at sector / business unit level keeping in line with the John majority of the work force. The overall safety of the work place and Keells Group policy document. the procedures and practices in place to this regard, received one of the highest ratings by the staff during this survey. All group companies reported on information pertaining to the last financial year ending 31st March 2011 with regard to Occupational This year, goals and targets in respect to Occupational Health & Health & Safety. Safety were set at the beginning of the financial year by all business units and in order to ensure that all sustainability initiatives flowed Outsourced employees have not been included in this assessment. through the entire group, sector representatives were appointed to However, the organisation will be including outsourced employees be in charge of each of their respective sectors with regard to all engaged in operations within its group companies, in assessments pillars of sustainability including Occupational Health & Safety. to be conducted in the future.
John Keells Holdings PLC – Sustainability Report 2010/11 73 HEALTH AND SAFETY
During the period of assessment, one occupational fatality was An Absentee is defined as an employee absent from work because recorded in the John Keells Group from Union Assurance Limited of incapacity of any kind, not just as the result of work-related injury as a result of a road side accident. No occupational diseases were or disease. recorded from any of the group companies. In other words an absentee day would constitute a day lost by a Injury Rate is defined under the GRI guidelines as the frequency of worker due to occupational causes and non occupational causes injuries relative to the total time worked by the total workforce in the as well. reporting period. During the period, a total of 180 staff were affected by occupational injuries of which 5 staff were based in the Republic Absentee Rate refers to a measure of actual absentee days lost as of Maldives. defined above, expressed as a percentage of total days scheduled to be worked by the workforce for the same period. Here the group took these days as the total number of days in the period for purpose 2009/10 2010/11 of calculation. No. of Staff affected by Occupational 238 180 Injuries The table below depicts the percentage of the Absentee Days in Total Number of Man days in the period 3,896,375 4,082,890 respect of the Total Man days in the period.
Lost Day Rate is defined under the GRI guidelines as the impact of 2009/10 2010/11 occupational accidents and diseases as reflected in time off work Total Absentee Days (TAD) 22,259.0 29,267.5 by the affected workers. The calculation ‘Lost days’ commence from the day after the injury takes place and such calculation entails Total number of Man days in the period 3,896,375 4,082,890 calendar days. To this extent, minor occupational injuries/diseases TAD as a % of Total Man days in the 0.5713% 0.7168% that occur causing an employee to be unable to report to work for period less than one day have been excluded. The graph below depicts the contribution of the Total Man Days Lost The Total Man Days Lost for the group for the reporting period due to Occupational Injuries and Diseases to the Total Absentee was 2,403 of which 244 were from the group companies based in Days of staff in the group. Maldives.
Man Days Lost vs Absentee Days
Total Man Days Lost
Total Absentee days
0 5000 10000 15000 20000 25000 30000
Throughout the course of the last financial year, the dengue epidemic struck Sri Lanka on two occasions and Colombo was one of the The table below depicts the percentage of the Man Days Lost in worst affected districts in both instances. This contributed to the respect of the Total Man days in the period. marked increase in absentee days over the past year. Further, incessant and heavy rainfall also accounted for severe flooding in one instance throughout the island. With many households being 2009/10 2010/11 affected and roads made impassable, the absentee days in most of Total Man Days Lost (TMDL) 1,023.5 2,403.0 the group companies heightened as against to the last financial year. Total number of Man days in the 3,896,375 4,082,890 period During the year in concern most of the group companies conducted awareness programmes relating to HIV / AIDS for their employees TMDL as a % of Total Man days in the 0.0263% 0.0588% and some even for the community. period
74 John Keells Holdings PLC – Sustainability Report 2010/11 The John Keells Hotels Group continuing with the HIV/AIDS workplace policy which was inaugurated on the 1st of December 2009, conducted various activities to educate the employees and community at large. The Cinnamon Lodge team during the past year covered over 9,000 personnel through the HIV/AIDS programs carried out.
One of the highlights this year was that two sessions were conducted at the L.T.T.E rehabilitation centre in Welikanda covering nearly 1,500 personnel.
Tea Small Holder Factories PLC during the period in concern covered around 1,400 personnel through various programs carried out by the individual factories. The Broadlands tea factory and the Kurupanawa tea factory conducted an eye and health clinic for approximately 800 personnel and the Hingalgoda tea factory conducted a medical camp for around 450 personnel.
A significant aspect in both scenarios was that a large number of staff also volunteered and assisted in carrying out the programs to those in the community.
None of the group companies / sectors reported workers involved in activities that would expose them to a high risk of specific diseases. Further to this, it is the group mandate that precautionary measures be implemented in any such areas identified as high risk.
As mentioned previously, the Group is currently in the process of formulating the second level OHS policies. The final goal is for all group companies (other than the IT/office industry groups) to obtain the OHSAS certification by the end of the up coming financial year. In this regard the John Keells Group will be exploring the option of obtaining third party expertise to assist in the implementation of the OHSAS certification in the various companies. Drawing internal personnel in companies already OHSAS certified, to assist companies still to obtain the certification will also be an avenue that will draw focus.
Further, the importance of conducting basic OHS awareness and prevention programs for staff, their families and the surrounding community where possible will also be communicated to all companies and they will be encouraged to conduct same and continue the positive trend seen in this regard within all the group companies.
John Keells Holdings PLC – Sustainability Report 2010/11 75 OUR CONTRIBUTION
The John Keells Group’s aim is to foster great relationships with communities and manage responsibly the impact of its operations on the community and environment. POLICY ON SOCIAL RESPONSIBILITY The John Keells Group believes in wider societal needs than our own and meaningfully enriching the lives of communities of which we are an integral part. We abide by the values of ‘doing the right things, always’ by ensuring that through our actions we demonstrate our commitment and respect for all our stakeholders, including the communities and the environment in which our businesses operate.
PRACTICES THAT ASSESS & MANAGE THE IMPACTS OF our commitment to understand and assess the impacts on the OPERATIONS ON COMMUNITIES communities affected by our operations, our determination to respect The John Keells Group works to maximise the positive impacts of their interests and our aspiration to ensure they derive meaningful our businesses on society. We also aim to be good neighbours in the benefits from our operations. communities we operate in. This is more than running our operations cleanly and safely. It means working with local people to address To be comprehensive, we assess the impacts when a business their concerns and help them benefit from our operations. enters, operates or exits a community. An integral part of this process is a mandatory questionnaire that has to be completed and The John Keells Group’s aim is to foster great relationships with signed off by each business head. This questionnaire which was communities and manage the impact of its operations on the introduced to all group companies this year is designed to capture community and environment responsibly. the impacts that result from conducting business in the community. This is used to measure and identify high risk areas. Our next step will The community policy accentuates our respect for the rights and be to ensure that measures are then taken to manage and mitigate interests of the people among whom we live and work. It articulates the negative impacts.
Community impact assessments stages:
Community impact assessments stages: Research Understand where we have come from, where we are presently and what the future environment would look like Engage Understand the commercial aspects and stakeholder perspectives of our community impacts Evaluate Analyse the research and evaluate the strengths, opportunities, weaknesses and threats Plan Develop a framework for planning and managing these threats and opportunities. Action Deploy the framework and asses its outcome
John Keells Holdings PLC – Sustainability Report 2010/11 77 OUR CONTRIBUTION
The identification and management of community impacts poses effects. These groups may include Indigenous Peoples, women, both challenges and opportunities and is key to successful risk children, elders, etc. assessment, decision-making, project development and promotion of social well-being. Throughout its existence, a strong commitment to society and the environment has been inherent in the John Keells Group. We have The above stated policies and their implementation and review will imbued the value of “doing the right things, always” by ensuring that be taken up on a formal basis. It will be made mandatory for group through our actions we demonstrate our commitment and respect for companies to carry out this assessment when entering and exiting all our stakeholders including the communities and the environment from an area. In addition a review of the impacts by the operations in which our businesses operate. This commitment has translated by each of the group companies will be conducted annually and into our community investment programmes and sponsorships, where applicable action plans to manage impacts will be formulated our staff engagement with the wider community through voluntary at Sector committee or group management committee meetings. service as well as our ongoing dialogue with our stakeholders to better understand their needs. When identifying impacts of operations on communities we undertake a rigorous approach which captures: JOHN KEELLS AND THE COMMUNITY
Earnings: The impact on the earning potential of businesses in the community both supporting and competing. Policy on social Some potential changes that seem positive in the outset may also have negative effects. For example, wage increases may improve responsibility purchasing power, trade in consumer goods and entrepreneurial The John Keells Group believes in opportunities, however, it may exacerbate inequalities and facilitate health-threatening behaviours such as drug and alcohol abuse. wider societal needs than our own and meaningfully enriching the lives of Employment: The impact on the employments rate in the community including communities of which we are an integral the number of community members employed by our organisation. part. We abide by the values of ‘doing New projects can often move workers into an area or attract people looking for employment. Opportunities include employment and the right things, always’ by ensuring that income creation, local sourcing of goods and services. through our actions we demonstrate our commitment and respect for all our Environment: The impact on the environment including hazardous materials, stakeholders, including the communities emissions, discharges and waste disposal. and the environment in which our
Health and safety: businesses operate. The impact on community health and safety including injury and disease. At John Keells, Corporate Social Responsibility (CSR) represents how An influx of newcomers seeking opportunities can introduce health our values, corporate culture, and operations intrinsically involve and risks, such as the exposure of the local population to transmittable reflect social, economic and environment concerns. Our focus is on diseases. Environmental impacts such as dust and noise may cause six key areas – namely, Education, Health, Environment, Community health problems and require programmes and actions to mitigate and Livelihood Development, Arts and Culture and Disaster Relief, impacts. An influx of outsiders to local communities may also create with each area being aligned to the Millenium Development Goals social conflict and rivalry. (MDGs) as well as the United Nations Global Compact (UNGC) of which JKH PLC is a pioneer participant. Our goal in each of these Infrastructure: areas is set out below: The impact on community infrastructure both positive and negative. The development of a project can bring new infrastructure and services to an area such as roads and health services. However, a sudden increase in population may mean that the demands for infrastructure and services such as education, health, sanitation, transportation, power and housing may exceed the available supply.
Other impacts: Impact from/ on involuntary resettlement, physical displacement, local culture, gender, indigenous people, and cultural heritage. It is important to consider groups who may be affected differently by a project as a result of characteristics that make them vulnerable, traditionally excluded from opportunities or most at risk from adverse
78 John Keells Holdings PLC – Sustainability Report 2010/11 Education Health Environment Community Arts & Culture Disaster Relief & Livelihood Development JKH is committed JKH is committed JKH is committed JKH is committed JKH is committed JKH is committed in providing in ensuring in minimizing the in reaching out to sponsoring to carry out educational productivity via a impact of the to communities arts and collective relief opportunities to healthy society. Group’s operations surrounding its culture towards efforts in times of disadvantaged on the environment operations through safeguarding and natural and man- groups of the and carries out constructive promoting the made disasters, community as a conscious and dialogue with cultural heritage of through staff we believe that collective effort in stakeholders and Sri Lanka as well volunteerism. education is the this regard. staff volunteerism. as boosting the foundation for an Fostering the spirit livelihoods of those enlightened and of entrepreneurship engaged in arts civilized society. as a key to and culture sustainable development is the primary objective of such projects.
by the Manager of the Foundation under the guidance and direction of JKH’s Head of CSR and with the support of a cross-functional team of 18 senior executives drawn from various industry groups within the company. Each project is championed by a member of the MC and implemented by a project sub-committee comprising volunteers from across the Group. The MC meets monthly, the Foundation’s activities are reported to the Executive Committee on a quarterly basis and its accounts and operations are audited annually.
John Keells Foundation2 (“Foundation”) – a company duly incorporated under the law and also registered as a “Voluntary Social Service Organisation” with the Ministry of Social Welfare – continued to drive the Group’s social responsibility initiatives from the Centre while individual companies of the Group also engaged in community service activities which complement their respective businesses as well as the broad focus areas of the Foundation.
Social responsibility has the highest commitment of the senior leadership and management of the John Keells Group, with Chairman, John Keells Group, and the other executive directors of John Keells Holdings PLC (JKH) comprising the Executive Committee of the Foundation. While the Foundation has a Management Committee (MC), the Foundation’s initiatives and activities continue to be handled
John Keells Holdings PLC – Sustainability Report 2010/11 79 OUR CONTRIBUTION
Project Entering Operating Exiting English Language Scholarship Programme (English for Teens) √ √ √ “The Final Step” - University Soft Skills Programme (University of Sri Jayawardenepura) √ √ √ Neighourhood Schools Development (Ongoing) √ (Ongoing) John Keells HIV & AIDS Awareness Campaign (Awareness Sessions) √ √ √ John Keells Vision Project √ √ √ Rumassala Nature Field Centre (Ongoing) √ (Ongoing) Butterfly Garden at Cinnamon Lodge, Habarana (Ongoing) √ (Ongoing) Project Leopard √ √ (Ongoing) John Keells Tree Planting Campaign √ √ √
Village Adoption Project - Halmillawe (project completion - March 2010) (Ongoing) (Ongoing) √
Village Adoption Project - Mangalagama (commencing April 2010) √ √ (Ongoing) BPO project at Mahavilachchiya (Ongoing) √ (Ongoing) BPO project at Seenigama √ √ (Ongoing) JKH Sustainable Sourcing Initiative (Ongoing) √ (Ongoing) Slave Island Railway Station (Ongoing) √ (Ongoing) Kala Pola 2011 √ √ √ Disaster Relief (Flood Relief 2011) √ √ √
In addition to the initiatives detailed below, companies of the John Keells Group including the Foundation have supported numerous other community service projects through donations of cash and kind.
JKF PROJECT ALIGNMENT TO THE MILLENNIUM DEVELOPMENT GOALS AND UNITED NATIONS GLOBAL COMPACT PRINCIPLES
United Nations JKF Projects Millennium Development Goals Global Compact Village Adoption Project – Mangalagama Mahavilachchiya BPO Project Goal 1 Eradicate extreme poverty and Principle 1: Businesses should hunger support and respect the protection of Seenigama BPO Project internationally proclaimed human rights
Principle 2: Make sure that they are not English Language Scholarship Programme complicit in human rights abuses Goal 2 Achieve universal primary Neighbourhood Schools Development Project education
Goal 3 Promote gender equality and Employment of differently abled persons empower women Principle 6: The elimination of employment discrimination
Vision Project Goal 6 Combat HIV/AIDS, malaria, and other diseases HIV/AIDS Awareness Campaign
80 John Keells Holdings PLC – Sustainability Report 2010/11 United Nations JKF Projects Millennium Development Goals Global Compact
Nature Field Centre at Rumassala, Galle
Paper Conservation / Recycling Project John Keells Tree Planting Campaign Principle 8: Undertake initiatives Goal 7 Ensure environmental to promote greater environmental Keells Super Red Bag Initiative sustainability responsibility Project Leopard Butterfly Garden at Cinnamon Lodge, Habarana Compost Bag project at Cinnamon Lodge, Habarana University Soft Skills Programme
Transport & Logistics Management Degree Goal 8 Develop a global partnership Programme [BSc (T&LM) Hons] at the University of for development. Moratuwa Kala Pola
DEVELOPMENT AND IMPACT OF INFRASTRUCTURE INVESTMENTS AND SERVICES PROVIDED BY JOHN KEELLS FOUNDATION PRIMARILY FOR PUBLIC BENEFIT THROUGH COMMERCIAL, IN-KIND, OR PRO BONO ENGAGEMENT
Project Infrastructure Investment Service Commercial In-kind Pro bono Commercial In-kind Pro bono English Language √ Scholarship Programme “The Final Step” - University √ Soft Skills Programme Neighourhood Schools √ √ Development John Keells HIV & AIDS √ √ Awareness Campaign John Keells Vision Project √ √ Rumassala Nature Field √ √ Centre Butterfly Garden at √ Cinnamon Lodge, Habarana Project Leopard √ √ √ John Keells Tree Planting √ √ √ Campaign Village Adoption Project - Halmillawe (five-year project √ √ √ commencing 2005) Village Adoption Project - √ √ Mangalagama (commencing √ √ √ 2010) BPO project at √ √ √ √ √ √ Mahavilachchiya BPO project at Seenigama √ √ √ √ √ √ KH Sustainable Sourcing √ √ √ Initiative Slave Island Railway Station √ √ √ Kala Pola √ √ Disaster Relief √ √
The above projects were undertaken based on a needs assessment arising from stakeholder engagement which would be continued for all ongoing projects.
John Keells Holdings PLC – Sustainability Report 2010/11 81 OUR CONTRIBUTION
EDUCATION As proposed in the Sustainability Report 2009/10, the Foundation The John Keells Group firmly believes in 2010/11 reintroduced the foundation-level programme for school that education is the foundation children within the age limits of 12 to 14 years. Branded as “English stone of an enlightened and civilised for Teens”, the programme is aimed at providing a basic foundation society. As such, education-related in English language training for early teens from disadvantaged initiatives take high priority on its schooling backgrounds. agenda of corporate responsibility.
Focus Area in 2010/11 Project Objective Project Scope in Project Impact JKH Volunteers 2010/11 English for Teens - A English for daily use and First Intake: Ampara, Total of 1149 students 2 MC members in four-month course for basic interactions, helping Anuradhapura, Batticaloa, registered; general. Also 20 school children within students understand and Chilaw, Colombo, First intake - 503 students volunteers from across the age limits of 12 to 14 use familiar everyday Gampaha, Kurunegala, completed course. the Group represented years expressions, such as Matara and Ratnapura JKF at the inaugural introducing oneself Centres (9) Second intake - 435 programmes at the and others and asking students completed respective centres. or answering simple Second Intake: course. Classes in questions. Bandarawela, Galle, Habarana (80 students) Habarana, Jaffna, Kandy, and Samata Sarana (20 Negombo, Panadura, students) are ongoing. Trincomalee and Vavuniya Centres and Samata Sarana organisation (10)
complete an evaluation form at the end of the course and the student feedback is analysed and noted towards continuous improvement of the programme. The Foundation has also scheduled an English Day in June 2011 to provide a platform for the scholars to display their newly-acquired English skills in a public forum which will also see the distribution of certificates to those who successfully passed the final examination.
The Foundation was represented at the inaugural ceremony at most of the locations by staff volunteers from across the Group. A highlight during the year was the extension of the programme to cover a special class for 20 children of Samata Sarana – a non-government charity organisation dedicated to serve the poorest and most vulnerable slum dwellers including children regardless of gender, race or religious belief. Meanwhile, certificates were distributed to a total of 1237 scholars who had completed the “English for Life” programme of 2009/10. The distribution of certificates to successful candidates of both intakes took place at the respective Gateway Language Centres. Principals of selected schools in the 18 pre-identified areas were requested to nominate eligible candidates under the two intakes “English for Teens” is another initiative under the English Language during the year. Scholarship awardees were selected after a Scholarship Programme of John Keells Foundation, an “Approved placement test set by Gateway Educational Services (service Charity” under the Inland Revenue Act, No. 10 of 2006 (Gazette No. provider for the project) and a total of 1149 students registered 1,561 dated 01st August 2008). Launched in 2004 in collaboration during the year, entitling them to course fees, examination fees, text with Gateway Educational Services, this long-term project is aimed book and other course material. 503 out of a total of 565 students at enhancing English language skills of schoolchildren and youth registered under the first intake completed the course and sat for across the island towards improving their opportunities for higher the final examination, with a recorded 97% passing it. 584 students learning and sustainable employment in the modern age and has to registered under the second intake of the programme of which date empowered the lives of over 4,400 individuals. 435 have completed the course and sat for the final examination with a recorded 97.7% passing it. The classes at Habarana and The Final Step, a series of five-day workshops on soft skills Samata Sarana organisation are in progress and due to conclude designed for the benefit of university undergraduates towards by June and August 2011 respectively. Each student is required to grooming them for employment, was conducted for the first time at the University of Sri Jayewardenepura in collaboration with the
82 John Keells Holdings PLC – Sustainability Report 2010/11 Focus Area in 2010/11 Project Objective Project Scope in 2010/11 Project Impact JKH Volunteers University of Sri To enhance the 5-day series or Average of 260 15 Jayewardenepura, Sri employability of local workshops involving: undergraduates Lanka graduates by changing Panel Discussions on Employer each day their perspectives of Expectations and Team employment in Sri Building & Leadership Skills; Lanka and increasing Interactive Workshops on: their adaptability to the Personality Development & requirements of the Confidence Building; Adapting workplace. to the Corporate Environment; Personal Grooming; and Corporate Hospitality
Career Guidance Unit (CGU) of the University. The programme saw an enthusiastic response from graduating batches of students from the Management, Science and Arts Faculties of the University with each day’s workshop attracting an average of 260 undergraduates.
The programme received very positive feedback from the students, faculty members and the CGU. This was the fifth such soft skills programme presented by the Foundation since its launch in 2006, comprising two programmes each at the University of Kelaniya and the University of Moratuwa. Based on the overwhelming success of, and growing demand for the programme, more such programmes are planned for the future.
Under the Neighbourhood Schools Development Project, the Foundation continues to support the development and maintenance of infrastructure and facilities of five disadvantaged Government schools in Colombo 2 (the location of the Head Office and several businesses of the John Keells Group), towards creating an environment more conducive for learning. The project is implemented through the CSR teams of Cinnamon Grand Colombo and Cinnamon Lakeside Colombo. The following work was undertaken in the five schools in 2010/11:
John Keells Holdings PLC – Sustainability Report 2010/11 83 OUR CONTRIBUTION
Project Location/s JKH Overall Objective Focus Area in 2010/11 Direct Impact in 2010/11 Volunteers • Construction of doorways in Grade 3 and 4 classrooms and Store Room • Renovation of existing racks in Grade 1,2 and 3 classrooms • Renovation of Canteen door and existing Holy Rosary Sinhala racks 200 students 14 Vidyalaya • Renovation of fans in Main Hall and class teachers rooms • Construction of a mesh in the computer room • Construction of new door frame in room adjoining the library • Donation of racks for the library • Rewiring of school 8 • Replacement of the existing lattice with glass in Science room and corridor • Reconstruction of performing stage in Main Hall • Construction of glass window frames to Improving the overall Holy Rosary Tamil Grade 3 classrooms 158 students 18 educational facilities Vidyalaya • Construction of iron grills in Grade 10 Dancing teachers of five disadvantaged Room government schools • Renovation of wash rooms (cisterns and located near John Keells wash basins) Head Office in Colombo 2 • Painting of library and corridor • Reconstruction of a doorway to a Grade 1 classroom • Creation of a steel canopy with a new gate and concrete walkway from the entrance of Al Iqbal Muslim school to the school building as a shelter 448 students 28 Balika Vidyalaya from rain teachers • Painting of the boundary walls • Donation of a podium • Conversion of a store room to a class room Sri Sariputta Maha • Refurbishment of the children’s playground 250 students 15 Vidyalaya • Organising mural paintings on the main wall teachers • Donation of 6 computers • Renovation of the Sports Room and Front Elevation T. B. Jayah Maha 50 students 30 • Donation of 40 plastic chairs Vidyalaya teachers • Art competition held on the theme of Environment
During the year under review (as in the previous two years) eligible and Supply Chain Management or Public Transport. Whilst the students of the five schools could also apply for scholarships under scholarship programme is a great boon to the undergraduates - the English Language Scholarship Programme of the Foundation. A not only supporting their tertiary studies but also facilitating a host total of 107 students registered themselves for the programme under of attractive career choices - it also helps develop a much needed the first intake and followed classes conducted weekly in one of the resource base of professionals for the country’s growing transportation schools whilst a total of 100 students completed the course and sat industry. Admission to the degree programme is based on the for the final examination. selection criteria of the University Grants Commission and the intake is limited to 50 students. The scholarship programme consists of an The Transportation Group of John Keells Holdings PLC continued aggregate of 26 scholarships awarded on a both need- and merit- its sponsorship of the Scholarship Programme for the students based scheme. The first year students are entitled to a need-based reading for an Honours degree of Bachelor of Science in Transport scholarship while the second, third and fourth year students benefit and Logistics Management (BSc (T&LM) Hons.) at the University from a merit-based scholarship. In 2010/11, a total of 26 first, second, of Moratuwa. This 4-year programme, which commenced in 2006, third and fourth year students were granted scholarships. Meanwhile, is a strategic CSR project designed to develop the knowledge, skills as all lectures are conducted entirely in English, the first-year students and attitudes necessary to equip the undergraduates to face the (numbering 50) were also provided English Language training via a modern day challenges in the fields of Aviation, Shipping, Logistics custom-made programme conducted by Gateway. Each student is
84 John Keells Holdings PLC – Sustainability Report 2010/11 required to complete an evaluation form at the end of the English HEALTH language programme and the student feedback is analysed and noted The John Keells Group believes that towards continuous improvement of the programme. In 2011, the plan a healthy society is a productive is to hold a five day “Total Immersion Camp” to facilitate a conducive one. During the reporting period, the environment for the students to communicate only in English. Foundation continued its long-term focus on two areas of health which Whittall Boustead (Travel) Limited, a subsidiary of John Keells are considered pertinent to Sri Lanka Holdings and an Inbound Tour Operator company, has sponsored as a developing nation. the school requirements of the students of Sidhuhath Vidyalaya in Gallala, Ratnapura for the 10th successive year. Each year, since The John Keells HIV/AIDS Awareness Campaign, implemented 2001, the staff, tour leaders and suppliers of the company and through the Foundation, has targeted the employees of the John its principals Kuoni and their staff have voluntarily contributed to Keells Group, the communities around its business locations, other the purchase of stationery requirements of all the students of this corporate entities, most at-risk persons (MARPs) and the general disadvantaged school (presently numbering 220), including the public. In the reporting period, the programme continued with its provision of shoes and an extra uniform for some children who dual objectives of creating awareness amongst MARPs as well as could not afford it. All Government schools provide free education workplace education. The Group is committed to combating HIV and to the students including text books and one free uniform. However AIDS to ensure that its status in Sri Lanka remains ‘low prevalent’. the students are required to purchase exercise books and all other In this regard, the Group supports prevention through education and stationery items which most children from rural areas find difficult access to correct information. 111 sessions were carried out during to fund. In this context, the stationary requirements of the students the year, educating a total of 15,078 persons including members from Year One to Year 11 (the school has classes up to Ordinary of the armed forces and the military police, staff of the John Keells Level only) for the whole year were distributed by the WBL’s staff who Group and other entities. Accordingly, the cumulative total of persons also donated sports equipment. Around 35 staff volunteers and tour educated under the Campaign since its launch in 2005 is 32,353. A leaders participated in the project. representative segment of participants at each awareness session is required to complete a feedback form as a means of facilitating (Please refer Annex 2 for additional initiatives in Education during continuous improvement. 2010/11).
Overall Objective Project Location/s in 2010/11 Focus Area in Direct Impact JKH Volunteers 2010/11 Preventing the spread of John Keells Head Office; Cinnamon Island Creating 15,078 persons 47 HIV and AIDS through Alidhoo; John Keells PLC; Keells Food awareness among educated in 111 education and awareness Products; Property Group of John Keells; Group staff and sessions among the staff, Retail Sector of John Keells Group/JMSL; at-risk groups; surrounding communities Transportation Sector of John Keells Group (including high-risk – Mackinnons & Peliyagoda; Leisure Inbound Roll out of HIV/ environments) and the Sector of John Keells Group; Colombo Cold AIDS Workplace general public Stores – Colombo & Kaduwela; MAETL; IT Policy (HAWP) Sector of JKCS & JKOA; Union Assurance; across the John Cinnamon Lakeside Colombo; Cinnamon Keells Group Lodge Habarana; Chaaya Blu Trincomalee; Yala Village; Sri Lanka Air Force Bases in Diyatalawa, Hingurakgoda, Palaly, Elara/ Karainagar, Parakrama/Colombo, Mirigama, Ekala, BIA Katunayake, Kalutara, Ratmalana, Koggala, Katunayake; Sri Lanka Army Bases in Iranamadu, Jaffna, Kilinochchi, Akkarayankulam, Vishwamadu, Ramanathanpuram, Alankulam, Jayapuram, Thunukkai, Mallavi, Monkeybridge – Trincomalee, Maduru Oya,7 Field Engineer Regiment; LTTE Rehabilitation Centre Thriconamadu, Vocational Training Inamuluwa; Sarvodaya – Trincomalee; Military Police Army Camp - Giritale.
A highlight during the year under review was the announcement of Sri Lanka, following a similar rollout in the leisure industry companies a Group-wide adoption of an HIV and AIDS Workplace Policy in in 2009/10. Being the first such Group-wide roll out by a Sri Lankan the lead up to World AIDS Day 2010, consequent to the rollout of conglomerate, it could well serve as a model to be emulated by other an HIV and AIDS Workplace Programme across all its companies in private sector companies and conglomerates in the country.
John Keells Holdings PLC – Sustainability Report 2010/11 85 OUR CONTRIBUTION
that were established in 2009/10 resulting in an aggregate of 19 An HIV and AIDS workplace policy seeks to create a conducive enterprise-based Workplace Committees to educate all employees environment for persons living with HIV and AIDS to work in of the John Keells Group on a continuous basis. Meanwhile, the and contribute to organisations, while the critical prevention train the trainer workshops conducted in collaboration with the aspect of the policy aims to halt the spread of the disease Employers’ Federation of Ceylon and the ILO during the year under through behavioural change effected via ongoing education review resulted in 27 more Master Trainers aggregating to a pool of of the employees of such organisations. Therefore, an HIV 53 Master Trainers in the Group. and AIDS Workplace Policy is a win-win proposition for both organisations and their employees. Hence the Group has The John Keells HIV and AIDS Awareness Campaign was highlighted adopted the tag line: “Saving lives and livelihoods”. in the ‘Best Practices by Private Sector in Disease Prevention and Management – South West Asia Region’ - a report compiled by the The policy adopted by John Keells Group companies consist Confederation of Indian Industry and Friends of the Fund South and of four principles, namely (1) Recognising HIV and AIDS as a West Asia (FoSWA). JKH is also a member of the Board of Directors workplace issue and treating it like any other serious illness/ of the Lanka Business Coalition on HIV & AIDS (LBCH) and the Head condition affecting the workforce, (2) Non-discrimination in the of CSR of JKH held the chairmanship of LBCH during the year under workplace against employees on the basis of real or perceived review. HIV status, (3) Confidentiality of personal data relating toa worker’s HIV status, and (4) Prevention of HIV and AIDS by Meanwhile, the Foundation pursued its goal to eradicate avoidable promoting change of attitudes and behaviours through ongoing blindness due to cataract in Sri Lanka through the John Keells education and awareness programmes. The four principles Vision Project. In 2010/11, the Project continued to touch the lives are based on the International Labour Organisation’s code of of vision-impaired persons, with a reported 337 cataract operations practice on HIV and AIDS and the world of work. being carried out islandwide (including collaborations with the International Association of Lions Clubs), bringing the total number of operations since the launch of the initiative in 2004 to 3963. In addition, 282 spectacles were provided to adults during the year As a lead up to the adoption of the Policy, a comprehensive action under review. The eye camps held under the project continued to plan was implemented in each company in Sri Lanka of the John attract volunteers from across the Group, in spite of being held Keells Group, encompassing the following: formation of an HIV and during Sundays and holidays in remote parts of the country. In AIDS Workplace Committee, training of Master Trainers to educate 2010/11 a total of 22 staff members volunteered in assisting at eye staff on HIV and AIDS, holding HIV and AIDS awareness sessions for camps, (some of them functioning as repeat volunteers at multiple all staff, launch of integrated internal communication plans to spread camps), with many sharing their deep sense of fulfilment at being knowledge on HIV and AIDS within the workplace on an ongoing part of this initiative. The volunteers provide administrative support basis, and the formal adoption of the Policy in each business unit or at the eye camps, but are also give candid feedback on the camps, industry sector involving all staff. Accordingly, in 2010/11, nine HIV their impact and areas for improvement. and AIDS Workplace Committees were added to the ten Committees
Project Location/s in JKH Overall Objective Focus Area in 2010/11 Direct Impact 2010/11 Volunteers
Kurupanawa Tea Factory - To assist deserving Galle; Melamulla – Panadura; Cataract surgeries (at Govt individuals regain Ettampitiya – Bandarawela; Hospitals and Lions Gift of 337 cataract patients their vision and Bandarawela; Badulla; Sight Hospital) 22 thereby their social Hingalgoda Tea Factory – 282 recipients of spectacles and economic Galle; Matara; Waskaduwa; independence. Donation of spectacles to Moratumulla; Raigampura children and adults
However, the Foundation continued to be constrained by the lack (Please refer Annex 3 for additional initiatives in Health during of sufficient medical resources in achieving better targets during the 2010/11) reporting period and attempted to mitigate the issue by increasing its collaboration with the International Association of Lions Clubs and the Lions Gift of Sight Hospital in Panadura. Discussions were also initiated with the Approved Charity “HelpAge” with the same objective.
86 John Keells Holdings PLC – Sustainability Report 2010/11 ENVIRONMENT The Butterfly Garden at Cinnamon Lodge, Habarana, launched in The rapid development taking place 2008, continued to attract many visitors, including guests of Cinnamon around us poses a potential risk to Lodge and Chaaya Village, Habarana as well as schoolchildren of the our environment and biodiversity. area. During the year under review, the facility was given a facelift Whilst a conscious and collective with the introduction of over 300 plants and paved pathways which effort is necessary to save our planet, attracted positive feedback from the visitors to the garden. The hotel the John Keells Group recognises its garden team maintains the facility under the supervision of the Keells responsibility in this regard. Hence, Hotels - Nature Odyssey focal point. This together with the increase whilst the Sustainability Initiative in tourism following the end of the ethnic conflict have resulted in of the John Keells Group (as reported in the Environmental Impact improved visitor numbers, with the Garden attracting approximately section) drives efforts at minimising the impact of the Group’s 100-150 visitors per month during 2010/11, while the total number operations on the environment, the Foundation spearheads the of visitors since the project began has exceeded 4000. The project Group’s commitment to sustain and strengthen the communities and has helped visitors appreciate butterflies in a natural setting, while environment that have been the backbone of the Group’s success. offering these precious insects a habitat to thrive in. The project also helps Cinnamon Lodge, Habarana, to reinforce its position as In 2010/11, the Foundation continued to consolidate the activities a green hotel. at the Nature Field Centre at Rumassala, in Galle. A collaboration of the Foundation with the Central Environment Authority (CEA) aimed at facilitating experiential learning about the environment and biodiversity, primarily among schoolchildren, the Centre has given impetus to the conservation efforts of John Keells whilst also creating an opportunity for a successful public-private partnership with the CEA. The Centre - which conducts half-day programmes for schoolchildren and other interested groups to raise awareness on the need to protect the Environment and our rich biodiversity, eco- friendly practices and the importance of co-existing in harmony with the environment - continued to attract a healthy number of visitors per month, mostly schoolchildren. As per the data reported by the CEA, a total of 41 programmes had been conducted at the Centre during the year under review covering an aggregate of 2039 persons. This included 35 sessions conducted for schools and educational institutes covering a total of 1767 students and accompanying teachers, well exceeding the plan of 27 sessions for the year. The additional six programmes benefited interested groups such as local government officials and teachers.
During the year under review, the Foundation donated a laptop computer to the Centre for use in its educational programmes. The following statistics have been reported during the period under review:-
Visitors to the Butterfly Garden 01 April 2010 - 31 March 2011 April 143 May 160 June 135 July 103 August 103 September 198 October 202 November 128 December 170 January 153 February 192 March 184 Total 1,871
John Keells Holdings PLC – Sustainability Report 2010/11 87 OUR CONTRIBUTION
The Cinnamon Lodge, Habarana also continued with the Compost tonnes and by tractor loads to certain buyers, thereby reducing the Project during 2010/11, selling packs of compost to its visitors usage of inorganic fertilizers in gardens and farms. Sold in attractive and guests, as well as those of the neighbouring Chaaya Village, packaging and at a relatively negligible cost, the compost is made up Habarana whilst retailing packs through some of the Keells Super of the garden waste collected from the two Keells hotels in Habarana, outlets. Whilst the hotel itself uses the compost to produce organic along with farmyard manure, crop residue, dolomite and top soil. herbs and vegetables, it is also engaged in providing compost by
COMPOST PRODUCTION AND SALES – 2010/11
Sale
Month Production (Kg) Keells Supermarkets Hotel (Bags) Revenue (Rs.) (Bags)
April ‘10 500 25 50 6,250.00 May 500 24 75 10,025.00 June 500 8 - 800.00 July 500 11 - 1,100.00 August 500 48 - 4,800.00 September 500 6 - 600.00 October 500 2 26 2,150.00 November 500 23 6 2,750.00 December Nil due to rain 9 - 900.00 January ‘11 Nil due to rain 4 - 400.00 February Nil due to rain 14 24 3,200.00 March 500 47 - 4,400.00 Total 4,500 218 181 37,375.00 01 bag = 05 Kg.
During 2010/11, the Foundation undertook a new initiative called As a lead up to WED, a poster campaign was carried out across the “Project Leopard” in collaboration with Yala Village hotel towards Group’s business premises with the posters being printed on recycled reducing human - leopard conflict in the villages adjacent to Yala paper. As the Group’s contribution to The Plant for the Planet: Billion National Park. The growing population of leopards in Yala has Tree Campaign which is a worldwide tree planting initiative facilitated resulted in wandering leopards preying on domestic cattle which, in by the United Nations Environment Programme, the Foundation turn, has led to revenge attacks on the leopards by village herders. initiated a tree planting campaign which witnessed the planting of a Under Project Leopard, the Foundation – along with the Group’s Yala reported 473 trees across the Group’s different business locations. Village hotel - has begun implementing a simple but effective solution - steel pens to herd the cattle at night - thus protecting both cattle The John Keells Tree Planting Campaign was kicked off on 4th and leopards. Whilst three steel pens have already been installed, five June 2010 with Group Chairman, Mr. Susantha Ratnayake, planting more sites surrounding the Yala National Park have been identified a Na sapling (the national tree of Sri Lanka) at the John Keells for the installation of pens. Holdings PLC premises at Glennie Street. Several Group companies contributed to the initiative by planting trees within their own premises, The Foundation also initiated various activities during the year under and some others took it a step further, planting trees in public areas review to mark World Environment Day falling on 5th June 2010 as well. Strategic Group IT, a Group centre function, planted 20 Ehala and 2010 as the International Year of Biodiversity. saplings in the Vihara Maha Devi Park with the collaboration of the Colombo Municipal Council, while Ceylon Cold Stores planted 12 fruit and other saplings in its factory premises in Ranala. Other such The World Environment Day (WED) 2010 falling on 05th June noteworthy contributions by Group business units are the initiatives was celebrated around the world under the theme “Many by Cinnamon Lodge Habarana in the planting of 100 trees in total Species. One Planet. One Future”. The United Nations also within the hotel premises as well as close to the Habarana Tank, and declared 2010 the International Year of Biodiversity, making Yala Village which planted over 50 trees which belong to the dry zone it doubly opportune to stress the importance of biodiversity such as Kohomba, Kumbuk, Agil and Esala. Bentota Beach Hotel’s for human well-being, reflect on achievements to safeguard it contribution to the tree planting initiative was the inauguration of its and encourage a redoubling of efforts to reduce the rate of “Herb Garden” with spice plants unique to Sri Lanka within the hotel biodiversity loss. The John Keells Group commemorated WED premises as well as the planting of 30 coconut plants within the hotel through many environmentally-friendly initiatives spearheaded premises with the participation of both staff and guests. Other Group by John Keells Foundation. companies which actively contributed to the tree planting initiative are Chaaya Blu, Chaaya Citadel, Chaaya Island Dhonveli, Chaaya
88 John Keells Holdings PLC – Sustainability Report 2010/11 Lagoon Hakura Huraa, Chaaya Reef Ellaidhoo, Cinnamon Grand, Bollywood superstar Vivek Oberoi, who planted a sapling at Nuga Cinnamon Island Alidhoo, Cinnamon Lakeside, John Keells Stock Gama, while staff awareness, educational programmes and art Brokers, Lanka Marine Services, Tea Small Holder Factories PLC, competitions on WED were conducted for stakeholders by several Union Assurance PLC, Walkers Tours Ltd and Whittalls Travels Ltd. other business units across the Group.
With the protection of biodiversity too going hand-in-hand with the John Keells Group’s contribution to WED, the Foundation together with Cinnamon Lakeside launched the newly-landscaped area of the railway reservation bordering Masjidul Jalmiya Road in Slave Island on 31st May 2010. A commemorative plaque was unveiled at the occasion in the presence of a gathering representing Cinnamon Lakeside, Sri Lanka Railways, staff of the John Keells Group as well as area residents. The objective of the project was to re-green and beautify the Slave Island area.
RED BAG INITIATIVE Jaykay Marketing Services, which operates the Keells Super supermarkets, continued with its eco-friendly practice of selling and promoting the use of the reusable cloth bags known as “Red Bags”, as an alternative to polythene. During 2010/11, the supermarket chain continued to make steady progress in promoting the sale and re-use of the Red Bag with the objective of reducing the use of polythene.
Keells Super Red Bag Project – 2010/2011 during the period April 2010 - March 2011 Other businesses of the Group commemorated WED with other initiatives such as reef cleanups launched simultaneously under the Total Red Bags Sold 97,621 ‘Go Green’ initiative at all four of the Maldivian resorts belonging to Total Red Bags Reused 200,665 the Group. A beach cleanup was initiated by Bentota Beach Hotel, Total Red Bag Usage 298,286 while a lake clean up and an art competition for school children were organized by Chaaya Village Habarana. Cinnamon Grand Colombo, A marginal reduction is seen during the current against the previous initiated a tree planting initiative for children, in collaboration with reporting year as indicated below:-
Polythene usage Total customer Polythene usage Fiscal Year (Kg) count per visit (Kg) Apr 2008 to Mar 2009 77,966 7,701,222 0.0101239 Apr 2009 to Mar 2010 90,193 9,291,882 0.0097067 Apr 2010 to Mar 2011 94,830 9,295,956 0.0102012
A marginal reduction is seen during the current against the previous reporting year as indicated below:-
A progressive attitudinal change in the Sri Lankan consumer, together with greater commitment to using more environment- friendly alternatives to polythene, are expected to result in a growing impact on the project itself as well as the overall object of reduced usage of polythene.
The John Keells Group’s Paper Conservation Project, involving the collection of waste paper from the Group’s business locations for shredding and recycling, has gained momentum during the year under review. The project’s main objectives are the saving of trees and reducing the amount of waste paper otherwise ending up as landfill.
John Keells Holdings PLC – Sustainability Report 2010/11 89 OUR CONTRIBUTION
The contractor for collection and onward transmission for recycling (Pvt) Ltd. As per the contractor’s report, during the reporting year the of the Group’s waste paper since 2006 has been Neptune Papers direct and indirect impact of the project is as follows:
Waste paper collected by Neptune Papers (Pvt) Ltd. Indirect Impact - Savings Direct Impact 1 April 2010 - 31 March 2011 - Payment Collection Electricity Landfill (Cub Month Trees (Nos) Water (Ltrs) Oil (Ltrs) (Kg) (Kwh) Mts) April 1,028 5,140 17 32,670 4,112 1,804 3 May 1,373 6,865 23 43,634 5,492 2,410 4 June 1,370 6,850 23 43,539 5,480 2,404 4 July 3,410 17,050 58 108,370 13,640 5,985 10 August 6,209 31,045 106 197,322 24,836 10,897 19 September 3,810 19,050 65 121,082 15,240 6,687 11 October 584 2,920 10 18,560 2,336 1,025 2 November 4,602 23,010 78 146,252 18,408 8,077 14 December 2,362 11,810 40 75,064 9,448 4,145 7 January 1,874 9,370 32 59,556 7,496 3,289 6 February 9,202 46,010 156 292,440 36,808 16,150 28 March 1,107 5,535 19 35,180 4,428 1,943 3 Total 36,931 184,655 628 1,173,667 147,724 64,814 111
In addition to the positive environmental impacts of the project, Meanwhile, Union Assurance PLC continued with its paper recycling companies participating in the project benefit from the proceeds project in collaboration with the National Paper Company (successor due for paper collected and the Foundation’s has recommended to National Paper Corporation), a government-owned company that these proceeds be utilised for CSR activities of the respective currently functioning under the Ministry of Nation Building & Estate companies. Infrastructure. The direct and indirect impact of the project is as follows:
Waste paper collected by National Paper Company Indirect Impact - Savings 1st April 2010 - 31st March 2011 Landfill (Cub Month Collection (Kg) Trees (Nos) Water (Ltrs) Electricity (Kwh) Oil (Ltrs) Mts) April 569 10 18,083 2,276 999 1.71 May 721 12 22,913 2,884 1,265 2.16 June 673 11 21,388 2,692 1,181 2.02 July 798 14 25,360 3,192 1,400 2.39 August 632 11 20,085 2,528 1,109 1.9 September 760 13 24,153 3,040 1,334 2.28 October 652 11 20,721 2,608 1,144 1.96 November 567 10 18,019 2,268 995 1.7 December 526 9 16,716 2,104 923 1.58 January 657 11 20,879 2,628 1,753 1.97 February 578 10 18,369 2,312 1,014 1.73 March 579 10 18,401 2,316 1,016 1.74 Total 7,712 132 245,087 30,848 14,133 23.14
An aggregate payment of Rs. 46,272/- was reported for the period under review.
90 John Keells Holdings PLC – Sustainability Report 2010/11 Ceylon Cold Stores PLC continued its annual initiative in cleaning and maintenance of the banks of Depa Ela canal as well as landscaping and maintenance of trees planted in 2008 in Mahawela located on the Ranala Habarakada road.
DHONVELI MARKS EARTH HOUR
Chaaya Island Dhonveli observed the Earth Hour on Saturday 26th March from 20:30 hours to 21:30 hours.
The highlights of the programme: • Earth Hour programme leaflets were put in to all occupied rooms • Dinner time was advanced in all 3 restaurants. Staff dinner time too was adjusted accordingly. • Guests and Staff assembled at the Beach at 20:30 hrs. • Torches and bonfire were lit on the Beach. • Entire Island’s power supply was shut down at 20:30 hrs. • All the focal points of the Island were lit with candles. • Traditional Maldivian performances were held to entertain everyone. • At 21:30 hours normal operations of the Hotel resumed.
(Please refer Annex 4 for additional initiatives in Environment during 2010/11)
John Keells Holdings PLC – Sustainability Report 2010/11 91 OUR CONTRIBUTION
COMMUNITY/LIVELIHOOD VILLAGE ADOPTION PROJECT – MANGALAGAMA DEVELOPMENT Mangalagama in the Ampara District of the Eastern Province of Sri The John Keells Group reaches out Lanka is the second village to be selected for development under to the communities surrounding its this project. The selection was made taking into account the need operations through constructive to develop what was previously a `border village’ affected by the dialogue with stakeholders and long-drawn ethnic conflict, whilst also complementing the Group staff volunteerism, translating in subsidiary, Ceylon Cold Stores PLC (CCS), which has undertaken a range of community service a strategic business drive to develop the cashew farmers of the initiatives. Fostering the spirit of village to supply a substantial part of its cashew requirement for its entrepreneurship as a key to sustainable development is the primary ice cream products. objective of the Foundation-driven community projects. During a preliminary assessment carried out in June 2010 by the VILLAGE ADOPTION PROJECT-HALMILLAWE Foundation’s project team together with CCS representatives, a As reported in the Sustainability Report 2009/10, the Foundation stakeholder meeting was held with the village community leaders during the course of 2010/11 phased out its direct involvement in including the head priest of the village temple, grama sevaka and Halmillawe (a hamlet located in the North Central Province about representatives of the farmer society, cashew farmers and the 20 km from Habarana), having concluded its five-year plan for village school towards ascertaining the primary needs of the village. integrated development in the village. Before doing so, it concluded Inspections were also carried out of the village school as well as the planned training programme on fabric painting as requested by areas earmarked by the respective village representatives as existing the women previously trained in sewing. The Puttalam-based NGO, or potential sites for irrigational purposes. Through subsequent Wilpotha Kantha Ithurum Parishramaya, which has acted as the visits undertaken by the Foundation’s project team and CCS animator of the women’s empowerment initiatives at Halmillawe, representatives, potential sites for housing a cashew processing partnered the Foundation in this initiative. As expected, Cinnamon centre and storage facility were identified and negotiations Lodge and Chaaya Village continued to support the village as part of commenced with funding agencies to facilitate farmer loans. their community development initiatives. Following further discussions with the stakeholders and related authorities, it was decided to prioritise infrastructure development aimed at increasing the availability of water for basic needs and irrigation and, improving the facilities available at the village school and to facilitate livelihood development and capacity building of the cashew farmers of the village.
HALMILLAWE WOMEN DEMONSTRATE THEIR PROWESS IN FABRIC PAINTING [INTRANET ARTICLE]
REHABILITATION OF THE MANGALAGAMA TANK The women of Halmillawe ‘Diriyen Idiriyata’ society who were The objective of the project is to provide rehabilitation works trained in fabric painting under the patronage of John Keells of the Mangalagama Tank at Mangalagama Village, Batticaloa Foundation (“Foundation”) held an exhibition of their creations District. Activities included in the rehabilitation are: on Saturday, 13th October 2010 at the Halmillawe temple • Tank Bund formation premises. John Keells was represented at the exhibition by • Deepening of Tank bed two staff members of The Cinnamon Lodge. At a meeting • Raising the Concrete core wall of the Tank bund held thereafter, ideas were exchanged about the benefits of • Construction of spill cum Causeway the training and market opportunities for finished products. The women were keen to pursue an apparel enterprise based on the growing demand in the area and Cinnamon Lodge is exploring means of supporting this fledgling enterprise. In keeping with the project objective of village development through self-reliance, the civil work is carried out by the Mangalagama Farmer Halmillawe was the first village to be developed under the Organization under the direction and supervision of the Department of Foundation’s Village Adoption Project. Under this 5-year Agrarian Development, Ampara. Related contracts were signed with project, many aspects of the village - which is mostly the above parties and preliminary work commenced in December dependant on agriculture - were developed including irrigational 2010. The work which was due to be completed in 3 months was infrastructure, village school and pre-school infrastructure and hampered by the flash floods affecting the region in January/February facilities, alternative power sources and, entrepreneurship 2011 and has thus been extended by a commensurate period. development initiatives.
The Foundation also embarked on infrastructure development One of the main highlights of the project was the establishment work in AM/ Managalarama Maha Vidyalaya, Mangalagama, having of the women’s society ‘Diriyen Idiriyata’, and the initiatives identified and prioritized urgent needs for the school in consultation undertaken through the society. A village-based savings with the principal and obtained approval for the proposed work from scheme as well as income generation initiatives such as the Zonal Educational Office in Ampara. mushroom cultivation, sewing and, most recently, fabric painting have been successful in empowering and incentivising the membership towards financial independence.
92 John Keells Holdings PLC – Sustainability Report 2010/11 TAKING CITY JOBS TO THE VILLAGE INFRASTRUCTURE DEVELOPMENT WORK IN THE VILLAGE OnTime Technologies (Pvt.) Limited at Mahavilachchiya in the SCHOOL North Central Province, Sri Lanka’s first recorded rural BPO, is also The development work undertaken in AM/Managalarama Maha flourishing, four years into its operations. The company works as a Vidyalaya, Mangalagama in 2010/11 are: service provider to InfoMate Private Limited (a subsidiary of John • Construction of a new foundation for, and restoration Keells Holdings PLC) and carries out transaction processing, as of, a derelict school building and rehabilitation of the an extension of InfoMate’s role of captive finance and accounting classrooms in the said building service provider for the John Keells Group. • Repair and reconstruction of two existing teachers’ quarters • Construction of one new Teachers Quarters • Construction of five toilets This ground-breaking project in the local BPO industry was • Provision of equipment for the pre school children’s initiated by John Keells Holdings PLC, John Keells Foundation playground together with the Foundation for Advancing Rural Opportunity (FARO) in March 2007. The immediate objective of the project was to create sustainable employment for talented rural youth, The civil work is carried out by a government-approved sub- enabling them to work from the familiar environment of their contractor appointed by the School Development Society under the own village. The long-term vision of the initiative is to create direction and supervision of the Zonal Education Office, Ampara. BPO capacity for Sri Lanka’s future outsourcing growth. Contracts in this regard were signed with the School Development Society and the Director, Zonal Education Office, Ampara. Work is in progress and is due for completion by June 2011.
Livelihood development During the year under review, CCS embarked on livelihood development and capacity building among cashew farmers in the village by working with the Cashew Farmers’ Association to enable them to grow, collect, process and deliver cashew directly to CCS at market prices, and thereby benefiting from the profits of the entire value chain. In this regard CCS: • has provided the newly formed Cashew Farmers’ Association of the village with a cashew splitting machine and roasting oven to process the cashew for CCS requirements. The machines were commissioned and handed over on 2nd June 2010 to representatives of the Cashew Farmers’ Association; • has been working closely with funding agencies toward arranging seed financing for the Cashew Farmers’ Association to purchase the cashew production in the area; • has indicated its willingness to guarantee the purchase of the entirety of the Cashew Farmers production at market prices.
In 2010/11, the number of youth employed by OnTime increased to 16 and plans are underway to expand the operation to the maximum possible in a sustainable manner, by means of outsourcing additional functions of InfoMate. In 2010/11, the scope of functions outsourced to OnTime continued to expand with bank reconciliations, Accounts Receivable, General Ledger and Indexing included in addition to the Accounts Payable function. InfoMate also assisted OnTime with two computers and a generator to facilitate uninterrupted power which has greatly contributed to business continuity. Two of the management team of OnTime underwent a custom developed management training programme to equip them with skills necessary to manage their team and grow their business. The Foundation also supported OnTime by funding a facility to securely house the generator and corporate t-shirts for the entire staff.
The project has proved to be a sustainable business model, creating economic benefits to the company whilst simultaneously generating sustainable employment opportunities for rural youth.
John Keells Holdings PLC – Sustainability Report 2010/11 93 OUR CONTRIBUTION
In fact, the year under review saw the establishment of a similar Foods and Retail Group of John Keells Holdings PLC continues to BPO operation called Seenigama BPO Technologies (Pvt) Ltd at boost agricultural activity in villages and raise the standard of living Seenigama, a tsunami-affected village in the Southern Province in diverse communities. It is one of our largest and most successful of Sri Lanka – a tripartite collaboration between John Keells sustainable projects with many sub-projects such as the ginger Holdings, FARO and the Foundation of Goodness (FOG). The and vanilla out-grower programmes, dairy production, the treacle project commenced with two agents but has quickly scaled up to project, purchase guarantees of pork, chicken and assistance seven agents within a space of six months. Training is provided in in the expansion of local, mechanised, de-boned meat. The retail InfoMate’s office in Colombo and the initial results have been very chain, Keells Super, sources a variety of low country and up country encouraging. Plans are underway to expand the number of seats vegetables from farming families in Thambuttegama (North Central quickly. InfoMate assisted by providing computers to aid the startup Province), Suriyawewa (Southern Province) and Nuwara Eliya phase and the requisite knowledge in terms of information security (Central Province), benefiting hundreds of farmer families. and office design. The combination of talented youth in Seenigama, many with accounting qualifications, the sustainable business The sustainable sourcing of ginger from local farmers was initiated by opportunities created by InfoMate and the support and mentoring Ceylon Cold Stores PLC (CCS) about eight years ago to facilitate the provided by FARO and FOG augur well for the future growth of this guaranteed purchase of ginger locally, while enabling the company rural BPO. The Sustainable Sourcing Initiative of the Consumer to source better quality raw material. The initiative also helped to progressively eliminate the importing of ginger. Commencing in Hatharaliyadde and Poojapitiya, this initiative was later extended to areas such as Dawulugala, Danture and Ankumbura in the Kandy and Kurunegala Districts, based on its success. While 80 farmers were involved initially, the total farming community involved in the initiative during the year under review amounts to around 250. While the company has about 80% of the market share in the country’s ginger beer market, CCS has succeeded in sourcing its the entire ginger requirement for products such as Elephant Ginger Beer and sliced dried ginger rhizome from these farmers.
During the year under review, CCS also succeeded in sourcing its entire requirement of raw vanilla pods used for Elephant House vanilla ice creams from local farmers. With CCS owning around 65% of the vanilla ice cream market, the project was primarily initiated to eliminate the need to import vanilla oleo resin which is used to manufacture the vanilla flavour, used in almost all CCS’s popular ice creams such as Vanilla, Fruit and Nut and Pani Cadju. Around 2500 farmers are involved in the project.
The following table demonstrates project performance during a three-year period commencing 1st April 2008 and ending 31st March 2011.
No. of farmers Total Annual Supply Total Payment (Rs. Primary Suppliers/ (KG/LTRS) Product Location Project Partners 2009/10 2010/11 2009/10 2010/11 2009/10 2010/11 Aludeniya CCS, Ginger Ginger Galabawa Growers and
Poojapitiya the Kandurata 125 253 14,514* 14,760 7,257,300 8,856,000 Uduwa Development Bank
all of Hataraliyadda supported by Central
in Kandy District Bank of Sri Lanka Meegammana West, Kandy Vanilla Vanilla 2,500 2,500 438** 925 2,762,049 6,937,500 Wattegama, Kandy Growers Association Waralla, Nilwala Food Treacle 12 12 39,000 42,000 5,070,000 5,460,000 Deniyaya Products Milk Maskeliya Hatton Dikoya Seven Hills Farms 1,100 1,100 948,761 900,094 46,241,976 69,586,858 Dimbulla Lakshapana
94 John Keells Holdings PLC – Sustainability Report 2010/11 Meanwhile, the other two companies of the Consumer Foods & Retail their produce to KFP, with the entire initiative being coordinated by a Group have reported the following sustainable sourcing initiatives:- society set up under the Kandy Vanilla Growers Association.
Keells Foods Products PLC (KFP), which has about 60% of the During the year under review, KFP also continued its successful market share for processed meat, and has been involved in sustainable sourcing initiatives relating to chicken and pork, thereby successful sustainable sourcing initiatives for products such as developing better levels of farming, while also improving the standard pork and chicken, introduced a new initiative in September 2010. of living of the farmers substantially. A stable purchase price for the The project involves the sourcing of selected vegetables and the produce is ensured despite the frequent market fluctuations, while entire requirement of spices needed for products in the Krest range the farmers are supported technically and financially to improve which is done through sustainable integrated farmer communities. production. Close to 142 farmers from several districts such as Matale, Kandy, Nuwara Eliya, Kurunegala and Kegalle are dedicated to supplying
Product Location Primary Suppliers/ Project No. of Total Annual Total Payment (Rs.) Partners farmers Supply (kg) Kaluaggala, Diulapitiya Kaypro Farms, Maxies Livestock S Bujjampola, Giriulla, N Brothers Farm, Pussalla Farm, Pork Weliweriya Katana, Dilini Farms, CIC Farms Sanjeewa 25 537,625 149,479,543 Farms, St. Anthonys Farm D S D Kosgama, Pamunugama Perera, W G Fernando Dambulla, Kandy Wennappuwa Hanwella, Kosgama Maxies & Company Pussalla Chicken Meethirigala Farms New Anthonys Farm Nelna 2,200 1,507,959 379,751,094 Kosgama, Farms Hanwella Meethirigala Meegammana Spices Kandy Vanilla Growers Association 2,300 5,430 4,296,102 West,Wattegama,Kandy Meegammana Vegetables Kandy Vanilla Growers Association 2,300 71,971 5,353,536 West,Wattegama,Kandy
SUSTAINABLE SOURCING BY JAYKAY MARKETING SERVICES IN 2010/11
PROCUREMENT OF LOW COUNTRY VEGETABLES and Galenbinuwewa, two villages in the North Central Province. Thambuttegama Vegetable Collection Centre During the year under review, too, JMSL continued to work with Vegetable Collection Centre at Thambuttegama is owned and these villagers and procured vegetables from July to October operated by Jaykay Marketing Services (Pvt.) Limited (JMSL). 2010. During the financial year 2010/2011, JMSL procured 536,000 Kgs of vegetables and fruits for a total value of Rs. 37,500,000/-. This SURIYAWEWA COLLECTION CENTRE entire volume was purchased direct from farmers in Mahaweli ‘H’ Suriyawewa Collection Centre started operations in January 2011 region in Thambuttegama. in the Walawa Mahaweli Area in the Southern Province. This Collection Centre was set up to procure low country vegetables The executive in-charge of the Collection Centre was assisted by and fruits. The executive in charge of the Collection Centre is one supervisor and five workers employed by JMSL. The Centre assisted by five workers employed by JMSL. JMSL has started worked with approximately 70 farming families whilst at any given working with approximately 30 farming families and procured time approximately 40 farmers supplied produce to the Collection around 110,000 Kg of vegetables and fruits at an aggregate value Centre. of Rs. 8,500,000/- during the final quarter of 2010/11. This is a well irrigated area which has high potential and JMSL hopes to In the last financial year, Thambuttegama Collection Centre and expand its operations in the area in the future. Connecting Regional Economies (CORE) program of USAID – Sri Lanka, were involved with farmer associations in Kebithigollawa
John Keells Holdings PLC – Sustainability Report 2010/11 95 OUR CONTRIBUTION
During the year under review, Walkers Tours Limited and Whittal PROCUREMENT OF UP-COUNTRY VEGETABLES Boustead (Travel) Limited (the destination management companies Nuwara Eliya Collection Centre of the John Keells Group) launched a unique initiative which assisted The Nuwara Eliya Agricultural Cooperative Society (AGCO) at their chauffeurs – most of whom had long term associations with the Meepilimana, Nuwara Eliya operates the vegetable collection companies - to purchase modern vehicles on a self financed model Centre on behalf of JMSL. They have an Operations Manager, two that will also result in 108 brand new Nissan Bluebird Sylphy vehicles Supervisors and 18 full time workers involved in this operation. being introduced into the tour operations of the John Keells Leisure This organization has a membership of more than 1,000 farmers Sector. This trend-setting business model involved the negotiation from in and around Nuwara Eliya and they procure all produce of an attractive purchase price with the brand agents as well as from the membership. During 2010/2011, JMSL procured just affordable repayment terms with a leasing company. To ensure a over 1,000,000 Kg of up country vegetables for a total value of win-win proposition for both the newly created entrepreneurs and Rs. 114,000,000/-. the businesses, the beneficiaries are also provided a guaranteed annual mileage at fixed rates.
Whittall Boustead (Travel) Limited, (a subsidiary of John Keells Holdings and an inbound tour operator company), continued to In each case, the value created to the farmers is as follows: support micro entrepreneurs through its following initiatives: • Increased income (a) Dharshana Hettiarachchi originally offered to make hand • Assured market for quality produce crafted wooden elephants as souvenirs for Whittals and Kuoni • Elimination of the middle man guests. Now the range of items has increased to key tags and • Technical assistance wooden caskets and Hettiarachchi employs several craftsmen • Market based cultivation for the purpose. • Exposure to developed markets (b) Flamingo Safari at Kirinda operated by Mr. Wimalasiri • Personal and lifestyle improvements Weerakone, is another successful partnership of Kuoni. • Emergence of a quality focused farming community Starting with just one safari jeep at the beginning of the partnership, Weerakone now owns a fleet of about 40 jeeps Meanwhile, in the Leisure Sector, resorts and hotels seek to and provides employment to 50 drivers and mechanics all purchase most of their fresh supplies such as fish, fruits, vegetables, drawn from among the villagers of the area. In keeping with flowers, etc. from their surrounding communities whilst local Kuoni’s health and safety measures, Flamingo Safari is the entrepreneurship is fostered through the patronage of local delicacies only jeep operator in Tissamaharama certified to provide jeep and sweet meats of acceptable quality. The Leisure Inbound Sector services to Kuoni clients. Flamingo Safaris also created the first also fosters entrepreneurship through their community based luxury jeep safaris in Yala. Today, Flamingo Safaris offers jeep sourcing mechanisms. excursions in Yala, Bundala, Katagamuwa and Udawalawe national parks receiving approximately 50% of business from Cinnamon Grand supports SMEs through its Nuga Gama Kade the Group’s DMCs. (boutique) which showcases a range of local handicrafts produced by small-scale rural craftsmen. The 30+ suppliers have been in the Other community development initiatives of the Group include industry for generations but have minimal exposure to an urban the ongoing refurbishment and maintenance of the Slave Island market. As they cannot supply on a large scale, the items at Nuga Railway Station - a historic colonial building and iconic landmark in Gama are tailor made and exclusive to Nuga Gama. By supporting Colombo 2 - under the patronage of John Keells in collaboration these craftsmen, the hotel not only develops livelihoods, but also with the General Manager, Railways since 2002. Renovation work supports the sustenance of indigenous artistry and crafts. in 2010/11, undertaken based on a needs assessment carried out in consultation with the Station Master, included repairing of the public restrooms including the one for differently abled, painting of the entire roof and exterior walls, replacing the lights along the arched platform leading to the Station Master’s Quarters, repairing and painting of the benches used by commuters while also adding new benches. In addition new speakers were installed to enhance the public address system at the Station and two flag posts erected at the entrance of the Station to be used for occasions. Meanwhile, the erection of a steel fence at the entrance of the Railway Station and the re-concreting of the platform at the rear end of the Station are in progress. The Group hopes to continue maintaining the Railway Station at a high standard in collaboration with Sri Lanka Railways. Formal and informal feedback continues to be obtained on an ongoing basis from the Railways authorities as well as Group employees who are commuters using the Station. Project work (including all repairs and routine maintenance of the building and service areas) is sponsored and implemented by John Keells PLC under the guidance of John Keells Foundation.
96 John Keells Holdings PLC – Sustainability Report 2010/11 Approximately four staff volunteers of the Group are engaged in project implementation and monitoring while the project is expected to have benefited over 3.5 million commuters during the year. Since the collaboration permits companies of the John Keells Group to advertise their products and services in the station premises, seven companies which have made use of this facility could also be considered beneficiaries of the project.
As an equal opportunity employer, the John Keells Group actively supports the gainful employment of differently abled members of the community. As a Steering Committee member of the Employers’ Network on Disability of the Employers’ Federation of Ceylon (EFC), John Keells Holdings PLC (JKH) has been actively supporting the initiatives of the Network. The John Keells Group had 14 differently- abled employees in its cadre during 2010/11. During the year under review, the Group also adopted and disseminated a guideline on the recruitment of differently abled individuals and will continue to facilitate the social and economic integration of the differently-abled through employment opportunities and other means in the ensuing year. DEVELOPMENT ASSISTANCE TO SMALL HOLDER GROWERS Tea Smallholder Factories PLC is dependent on its small holder (Please refer Annex 5 for additional initiatives in Community/ base for the supply of green leaf. The sustainability of the business Livelihood Development during 2010/11) of the company is directly related to the sustainability of its small holder supplier base. This is possible if the growers enjoy adequate margins from growing tea in their small blocks of land. Whilst it is well documented that the present production levels in the small holder sector is primarily due to the aggressive planting / replanting during the 1980s, it is a fact that replanting of low productive fields is slow and inadequate. Productivity declines with the ageing of tea.
Replanting in the small holder sector is an important activity towards maintaining the contribution made by this sector to the national tea production.
The company approached the task of identifying remedies to this situation by initially undertaking a sample survey to understand the constraints faced by the growers. The constraints identified were as follows:
Having identified the above constraints the company in 2010 / 2011 commenced on a pioneering project to assist its loyal and reliable suppliers who are desirous of developing their lands. The degree of assistance given to the growers was assessed on a case by case basis, on a plan developed and agreed between the grower and the company. The development programme was so designed that the small holder growers developed only a portion of their land, thereby ensuring adequate revenue from the remaining tea land to sustain their income.
Key assistance given to the growers include dissemination of knowledge on accepted agricultural practices such as land preparation including terracing as required, rehabilitation of soil with recommended grasses and fertilizing to ensure vigorous growth in order to build a healthy soil. The first stage of the project involving land preparation and rehabilitation is currently underway and the project is working satisfactorily.
Towards ensuring the availability of healthy tea plants, the company has handpicked competent nurserymen from the villages. These nurserymen will, under the guidance of the company Extension Team, follow accepted nursery practices towards making available healthy, robust tea plants to the participating growers.
John Keells Holdings PLC – Sustainability Report 2010/11 97 OUR CONTRIBUTION
Inadequacy of man-power Inability to commit for a long period of time Inadequacy of financial resources The rehabilitation of soil for a period of 18 months is an essential step in a good replanting programme. Whilst there is some assistance granted by the State to growers, it is inadequate to meet the funds required for necessary activities such as land preparation, procurement of plants and the application of fertilizer. Poor planting material Primarily due to cash constraints, most growers in the low elevations resort to low cost methods such as the use of small bag plants, which with inadequate root growth, becomes vulnerable during dry weather. Good agricultural practices Over the years, the quality of replanting has deteriorated to the extent that most growers are not conversant with good agricultural practices. Climate change There is an urgent need to follow good agricultural practices in all activities, to minimise the adverse effects of extremes of weather.
Foundation, the Kala Pola 2011 enjoyed the unbroken patronage of the John Keells Group for the 17th consecutive year.
Kala Pola 2011 saw the participation of 320 artists and sculptors and a growing clientele enjoying the display of a variety of visual creative art in a fun-filled atmosphere of music, refreshments and entertainment. The estimated total sales of the exhibitors on the day was Rs. 7 million with sales of individual artists ranging between
Conceptualised by the George Keyt Foundation, Kala Pola has enjoyed the unbroken patronage of the John Keells Group since 1993. While Kala Pola initially took off from the concept of open air summer art fairs in European capitals, like the legendary Montmartre in Paris, the underlying rationale for its existence goes beyond the search for fascinating colour, exuberance and camaraderie. It is more importantly a valuable forum to launch and sustain the careers of talented artists and In the first year of the project, 95 small holders are participating covering sculptors, foster the development of a client base, and thereby an extent of 65.5 acres. Towards facilitating knowledge transfer and promote art as a lucrative and professional career. Many Kala timely advice on replanting activities, the company has recruited Pola artists have been successful and have gone onto launch Extension Coordinators specifically for this pioneering project. Regular careers in the international arena. interaction between the growers and our Extension Team ensures that all activities are undertaken as per accepted practices.
The company will extend this pioneering project to the new financial year as well and is in the process of identifying growers, towards assisting them to replant their lands.
ARTS AND CULTURE The John Keells Group is committed to sponsoring arts and culture towards safeguarding and promoting the cultural heritage of the community.
Sri Lanka’s popular open-air art gallery cum art fair, ‘Kala Pola’, came alive on Sunday, 23rd January 2011 on the sidewalks of Ananda Coomaraswamy Mawatha, Colombo and was ceremonially inaugurated by Mr. Han Tao, Deputy Ambassador of the People’s Republic of China in Sri Lanka. Conceptualised by the George Keyt
98 John Keells Holdings PLC – Sustainability Report 2010/11 Rs.1,000/- to Rs.480,000/-. The event drew over 27,000 visitors and Keyt. This valuable collection of artwork is on permanent public was supported by 30 volunteers from the John Keells Group. display in the premises towards making it accessible to both local and foreign art lovers alike. This year’s Kala Pola included the novel feature of an art auction held at the National Art Gallery and conducted by John Keells Foundation In addition, all resort hotels of the Group continue to support local in collaboration with the George Keyt Foundation – possibly the first art and culture by engaging local artistes in entertainment provided Art auction to be held in Sri Lanka. 15 paintings of selected artists to guests. Hotels such as Bentota Beach Hotel further foster local came under the hammer at the art auction generating a total revenue art by licensing artists to exhibit and sell their creations in the hotel of Rs. 570,000. premises. All hotels also arrange traditional wedding ceremonies for foreign guests on request, replete with local customs and rituals. In 2011 too, each exhibitor was requested to complete and return a feedback form towards facilitating continuous improvement of Union Assurance’s ongoing CSR initiative “Pasalen Karaliyata” the event. Some of the staff volunteers were assigned to assist the undertaken in collaboration with the Ministry of Education is aimed exhibitors in this regard. Meanwhile, the staff volunteers too were at promoting aesthetic studies among school children, providing encouraged to share their impressions and suggestions for further talented children a platform to showcase their skills. First organised in improvement. The organising committee comprising representatives of 2007, season three had also been extremely successful, having been the George Keyt Foundation and the John Keells Group met at a post- extended to cover the North and East Provinces for the first time. event meeting to review the event and identify areas for improvement.
Meanwhile, Walkers Tours Limited (a member of the John Keells Group and an award-winning inbound tour operator company) located in Colombo 2 continues to host a stunning collection of paintings of the internationally-renowned Sri Lankan artist, George
PASALEN KARALIYATA – A CSR INITIATIVE BY UNION CATEGORIES OF COMPETITIONS ASSURANCE District Competition Pasalen Karaliyata is a national programme which was initiated in • Folk Dancing – Group (Grade 6 and above) Male / Female 2007 as a unique CSR initiative in collaboration with the Ministry / Tamil / Sinhalese of Education. The programme was aimed at contributing towards • Folk Music – Group (Grade 6 and above) Male / Female / the recognition of aesthetic talents of schoolchildren in national Tamil / Sinhalese schools and rewarding them for their skills. The program was • Art competition for children below grade 5 under 2 levels extended to recognise their performance as a university entry qualification. National Level • 40 schools (Total 1200 children) The Pasalen Karaliyata programme also offers rich rewards for the winning school children as well as the schools which they belong National Level - Finals to. Uniquely, it is not only the first, second and third place winners • *1st, 2nd and 3rd place winners were selected and rewarded who are singled out for recognition since the schools they attend at a special event held at the National Folk Art Centre also receive cash awards. (Janakala Kendraya), Battaramulla on 2nd April 2011..
This programme was successfully conducted for the 3rd This CSR initiative has been well received by both the consecutive season during the 2nd half of 2010 and the 1st quarter Department of Education and national schools as this is the of 2011. Unlike the previous seasons (when the children in the only programme which encourages children to demonstrate conflict affected areas could not participate), the 3rd season of the aesthetic skills in folk dancing, folk singing at individual Pasalen Karaliyata was extended to the North and East. This indeed level or group level to earn extra marks for the university entry created renewed enthusiasm towards this programme at a national qualification. level with Sinhalese and Tamil cultures blending with each other. Since Sri Lanka has a rich heritage of folk dance, music, drama THE HIGHLIGHTS OF THE PROGRAMME ARE AS FOLLOWS and creative art which must be preserved and fostered, the • Number of Districts included company’s end objective is to ensure that Sri Lanka’s cultural in the competition - 22 (including the North and heritage is protected and nourished for the benefit of future the East) generations. • Number of schools participating - approximately 380 schools • Number of children participating at district level – over 9,500 • Number of children participating at National level - over 175,000
(Please refer Annex 6 for additional initiatives in Arts & Culture during 2010/11)
John Keells Holdings PLC – Sustainability Report 2010/11 99 OUR CONTRIBUTION
DISASTER RELIEF Apart from the aforementioned CSR initiatives, supporting its fellow citizens in their hour of need has been a vital aspect of the John Keells Group’s culture over the years. The John Keells Flood Relief Initiative undertaken during the year under review exemplifies the commitment of the Group and its employees to the cause of disaster relief.
In the immediate aftermath of the floods, JKH committed a significant contribution to airlift cooked food to welfare centres in affected areas. The Group businesses located in the affected areas were also involved in distributing cooked food, dry rations and other essential relief directly to affected families in their respective areas.
Destructive flash floods ravaged many parts of Sri Lanka in January and February 2011, leaving 43 people dead and over a million displaced. The majority of the displaced were accommodated in camps set up by the government, whilst many others took shelter with friends and relatives, temples and churches. As the floodwaters began to recede, the displaced persons returned home, but many found that their houses, schools and belongings had been severely affected by the floods. The John Keells Group initiated the John Keells Flood Relief Initiative to provide both emergency and short term assistance to those affected.
Meanwhile, the Group’s CSR arm - John Keells Foundation (Foundation) - initiated a programme primarily aimed at involving the participation of Group staff. The Foundation sought the cooperation of the Group’s businesses in affected areas in order to assess the The Foundation also rallied the support of the Group employees beneficiary groups and nature of aid to be distributed as well as to to make voluntary contributions to the initiative. As a result of the distribute the relief items directly to affected persons. employees’ generous response, the Foundation was able to source and distribute UNICEF-identified school requirements for lower
100 John Keells Holdings PLC – Sustainability Report 2010/11 primary, upper primary and secondary levels to 1000 children in the Trincomalee District, dry ration packs comprising 2-weeks’ supplies for 100 families in the Anuradhapura District and household utilities such as mattresses, mosquito nets and cooking utensils for affected families in the Trincomalee District.
The Group employees also responded to the Foundation’s appeal for assistance in packaging of the school kits and family packs. Staff members worked on a voluntary, rostered basis to package the material at the Keells Hotels Management Services Central Purchasing Office (CPO) warehouse located in Colombo 02 and load them for dispatch to Group hotels in Habarana and Trincomalee. The CPO management and staff rendered yeoman service in coordinating the sourcing and packing operations. Group Company and operator of the `Keells Super’ supermarket chain, JayKay Marketing (Pvt) Ltd, supported the initiative in supplying 100 packs of dry rations packs, each comprising 2-weeks’ supplies for a family of four.
The Foundation ensured that all relief items were distributed directly to affected persons through the support of the Group businesses in centres in Madawala and Maha Rambawewa, Maha Meegaswewa the related areas. The distribution of relief items in the flood-ravaged and Halmillawe. Trincomalee District was undertaken by the management and staff of John Keells Group Resort Chaaya Blu, Trincomalee in cooperation STAFF VOLUNTEERISM AND CORPORATE SUPPORT AT JOHN with the Zonal Education Offices of the affected areas. 400 affected KEELLS students were provided school packs at T/As Safa Vidyalayam, in Staff volunteerism has become an integral part of the Group’s Kinniya. whilst educational material was also distributed among 600 community engagement strategy. This not only connects the John students in four schools in the Muttur area – namely, T/Sirimurugan Keells family more closely with one another and the community, Vidyalaya, T/Sampur Maha Vidyalaya, T/Sinhala Maha Vidyalaya and but also enables employees to develop skills such as confidence, T/Al Mina Vidyalaya. With most of the area being at least three feet communication, leadership, teamwork, whilst giving them pride in underwater, the flood relief came at a truly opportune moment and the organization and a sense of personal fulfilment. brought some consolation to the hundreds of children who had lost their precious school requirements. The family kits were distributed The Group encourages its employees to volunteer their services in to displaced families in Andamkulam by Chaaya Blu employees. corporate social responsibility (CSR) activities initiated both at Centre Letters of acknowledgement relating to the relief items were sent by (by the Foundation) and Business Unit level. In fact, the Foundation the related school and local government authorities. has only two dedicated employees. The Management Committee and the project teams of the Foundation comprise Group employees Meanwhile, the John Keells Flood Relief Initiative in the North Central who volunteer their time in the respective capacity. Project activities Province was supported by Group Resorts Cinnamon Lodge and are supported by a wider team of volunteers drawn from across the Chaaya Village in Habarana which facilitated the distribution of relief Group. items in the areas of Palugaswewa and Halmillawe in collaboration with the Divisional Secretary, Palugaswewa. A total of 100 dry ration packs were distributed directly to displaced families in welfare A presentation on CSR is made to each group of executive inductees under the Centre Induction Programme towards promoting volunteering in a project of their choice. This is also made an opportunity to make the inductees aware of the Group’s commitment to the principles of the UN Global Compact (UNGC) and what it entails. The UNGC principles and the Millennium Development Goals are also posted on the Group’s intranet for the benefit of staff. Employees whose involvement is required in CSR activities are released with minimum restraint and the senior management exercises a flexible policy toward the time devoted by staff to such projects. The John Keells Group does not account or charge for time spent by employees on CSR voluntarism. Similarly, the Foundation does not account or charge for human resources, planning and administration and overhead costs attributable to any of its projects.
John Keells Holdings PLC – Sustainability Report 2010/11 101 OUR CONTRIBUTION
staff members from across the John Keells Group took place on 19th March 2011 with the involvement of 46 volunteers who successfully cleared an estimated 5-km stretch. This initiative also marked one of the Foundation’s initiatives to commemorate 2011 as The International Year of Forests as declared by the United Nations.
The Foundation recorded a minimum of 402 volunteer engagements in various projects implemented or overseen by the Foundation during the reporting period.
Volunteers who have participated in various CSR initiatives have often shared their sense of fulfilment at being part of a community based activity, which has been circulated among others of the team for motivational purposes. During the year under review, a more formal feedback process was introduced towards obtaining structured feedback from the volunteers engaged in the Foundation’s projects.
During the reporting period, the Foundation also initiated During the year under review, in addition to its ongoing long-term various steps to recognise and reward volunteers. The projects, the Foundation planned and implemented three mass scale participation of volunteers in various projects of the Foundation activities to engage volunteers, namely: was acknowledged through notes of appreciation and news items posted on the intranet and the Group newsletter. The (a) Shramadana to beautify part of the Slave Island rail Foundation also awarded four V-SPARC (Values-Superior reservation Performance And Recognition Creation) awards to volunteers The objective of the project was to re-green and beautify the for their contributions to ongoing projects of the Foundation – Slave Island area with the participation of staff who had enlisted namely, individual awards to the project champions of HIV & into JKSRF’s volunteer network. The shramadana, involved the AIDS Awareness Campaign and Kala Pola and team member clearing and weeding of the rail reservation area bordering the of the John Keells Vision Project as well as a team award to boundary wall of Ceylon Cold Stores Head Office premises two members of the HIV & AIDS Workplace Committee at located on Masjidul Jalmiya Road which was badly neglected over time. Held on 11th December 2010, the shramadana attracted 16 enthusiastic volunteers from various businesses of the Group.
The area was subsequently levelled, turfed and planted with flowering plants to beautify and bring colour to the surroundings. The garden team of Cinnamon Lakeside provided technical support for this initiative. Day-to-day maintenance (including protection of plants) was contracted to a community leader of Slave Island whilst monthly maintenance was carried out by the Cinnamon Lakeside garden team comprising four volunteers.
(b) Shramadana to package flood relief items The packaging of school kits and family packs as part of flood relief for the Eastern and North Central Provinces took place on 10th and 11th February 2011 at the KHMS Central Purchasing Office (CPO) located at Vauxhall Street, Colombo 02. Thirty staff members from various businesses of the Group contributed to this worthy cause by assisting on a rostered basis under the guidance of the Foundation and CPO. The packaging and loading of the relief consignment were successfully completed on 11th February 2011 and the dispatch vehicle left Colombo Cinnamon Lodge, Habarana in recognition of their superior for Habarana and Trincomalee on the same day. contribution towards enabling the project target to be exceeded. (c) Shramadana at Kanneliya Forest Reserve The Foundation organised a shramadana at the Kanneliya As proposed in the Sustainability Report 2009/10, the Forest Reserve with the objective of removing the invasive Foundation also adopted a comprehensive Reward and species known as Nylon Bovitia (Clidemia hirta) which disturbs Recognition Process for CSR Volunteers of the Group for the soil and prevents native species of plants from regenerating. implementation from 2010/11 onwards. Under the new scheme, The initiative which received an enthusiastic response from a total of 335 volunteers were identified as having contributed
102 John Keells Holdings PLC – Sustainability Report 2010/11 to CSR activities initiated or overseen by the Foundation, either as project leads, team members or volunteers providing ground or administrative support during 2010/11. The names of all serving members among such staff were listed for recognition through the award of certificates as well as under applicable performance appraisal schemes. Meanwhile, the Foundation inaugurated a Volunteer Recognition Day to recognise and reward dedicated volunteers of the Foundation. At the inaugural event held on 25th April 2011, a total of 54 volunteer engagements in ongoing projects of the Foundation were awarded certificates by the Chairman of the John Keells Group in the presence of its senior management.
In the future, with the aim of strengthening the sustainability of the communities we engage with, the John Keells Group will continue to explore new opportunities to bring together community investment and engagement initiatives which are aligned with the Foundation’s focus areas.
John Keells Holdings PLC – Sustainability Report 2010/11 103 PRODUCT STEWARDSHIP
John Keells Group continues to be aligned with customer expectations, through continuous improvement and maintaining the highest standards. PRODUCTS AND SERVICES POLICY The John Keells Group will strive to maintain products and services at the highest standards through embracing industry and corporate best practice and compliance with all relevant local and international statutory and regulatory requirements in the markets we serve. All products and services will seek to identify and assess any environmental and social impact through their communications, services, operations and supply chain.
Products and Services are the lifeblood of the John Keells Group. The adopted. These have also been integrated into the current business activities in these areas not only influence the economic performance processes, and their achievements monitored closely. but also impact the society and the environment, thus, has a very close relationship to Triple Bottom Line reporting. In addition, the In our last report, we commented that labelling of our products production and marketing outcomes could impact any and all of and services would meet with stringent guidelines of Statutory, our Stakeholders, and the shift in our business philosophy from regulatory and market requirements. These are firmly entrenched in ‘Shareholder Value’ to ‘Stakeholder Value’ now holds us in good our processes, and business units continually assess the need for stead. Since many of the impact areas have been covered elsewhere new and additional information on labels that will help our customers in this Sustainability Report, the area under reference in this section to make informed purchasing/sourcing decisions on one hand, will be “Product Stewardship”. With our extensive range of products and meet the above requirements, on the other. The Consumer and services continuing to grow alongside the diversification of our Food and Retail industry group continued to improve information group, and as new items are added to this range, an equal focus of through labelling. Accreditation from standard bodies continued to Product Stewardship is applied to the new range. The John Keells be maintained, enhanced or included, which also brought dividends Group continues to be aligned with customer expectations, through through improved performance of internal processors. In the Hotels continuous improvement and maintaining the highest standards. sector, “Crescenting”, a certification issued by the Singapore-based Organisation bestowing the ‘Halal-Friendly’ rating to Cinnamon During the year business units of the Group established and lodge Habarana enables the hotel to cater to the ‘sensitivities’ of the documented goals and targets with respect to product responsibility. emerging Middle Eastern clientele. Different methods of tapping the information to ascertain whether these goals and targets have been met, as well as have been
John Keells Holdings PLC – Sustainability Report 2010/11 105 PRODUCT STEWARDSHIP
Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements Sourcing of Content or substances Safe use of product or Disposal of the product components with environmental and service social impact Yes 17 16 20 12 No 59 60 56 64 Total Companies 76 76 76 76
The table above represents the level of compliance. The numbers over 30 dishes, available at Cinnamon Grand’s several restaurants represent the companies that have provided the responses. is a response to provide menu choices to guests with diabetes and to enable them make an informed smart choice, whilst not taking The table above also includes companies which are Holding away the enjoyment of tasting good food. The Diabetic menu companies, Investment companies, Managing companies, Non- was compiled with the assistance of dieticians, doctors and other operational, Land only and Rental of office spaces. luminaries to the effect that each item on the menu details the total amount of calories, fat, protein, carbohydrates, fiber, cholesterol and Furthermore the task force strives to enforce a common template sodium so that guests know exactly what they are consuming. This and guideline which would be adoptable by all companies in order is a veritable healthy option to healthy eating for those with or without to achieve a more accurate implementation of the above. It is also Diabetes. noteworthy that the Green Globe certification of Hotels in the Leisure sector will further discipline the operations in terms of accurate and Another similar initiative is where Cinnamon Lodge Habarana plans detailed labelling through higher standards in sourcing of component, to soon include dishes made of ‘organic’ food in their fine-dining identifying hazardous content or substances, safe use and proper restaurant menu. The hotel has visited and discussed with several disposal. farmers in the region, methods of cultivation that will ensure fresh vegetable produce that can truly be labeled ‘organic’. Eleven LEISURE INITIATIVES IN PRODUCT RESPONSIBILITY farmers who have given a commitment to adhere to the principals of The biggest fear in food safety is food poisoning. The hotels in the growing organic food, consequent to a series of visits that involved John Keells Group have had considerable success tackling health inspections, dialogue and assurances, have been selected, and will and food safety because we have developed programmes and be the main source for the hotel’s requirements. policies that not only relate to the introduction of minimum quality standards and standard operating procedures, but are also aimed Our hotels continue to pay maximum attention to issues surrounding at educating our employees continuously. Other factors that drive product responsibility-especially focusing on the three key factors: momentum include regular training and employee motivation. supply chain, energy usage and product assurance. Monitoring and auditing is regularly undertaken, as is the bringing in of the self- Motivation that resonates towards innovation such as the creation assessment by each hotel component which has strengthened the of a ‘Diabetics Menu’ by Cinnamon Grand Colombo, introduced on overall monitoring procedure of their supply chain, with the ultimate 14th November to coincide with ‘World Diabetes Day. The menu of goal of ensuring that food and beverage served to all our guests is always labeled as safe to eat.
GROUP’S PROCESSES WITH REGARD TO MARKETING COMMUNICATIONS In marketing communication, the International Chamber of Commerce code of Advertising and Marketing Communications became more entrenched, as business units explored the code and ensured compliance. At the same time, the special committee appointed to validate media advertisements, was called upon to evaluate a larger number of such communications and ensured that the code was not compromised, whilst also ensuring that the communication went across in a socially responsible manner, to the community at large. They have looked to ensure that the communication is not misleading, that it is honest and setting a high ethical standard.
All companies are expected to conform to a set of guidelines extracted from the International Chamber of Commerce Code of Advertising and Marketing Communication Practice, with all businesses expected to comply with this code. The guide clearly explains how information should be communicated to the relevant stakeholders and the companies are expected to strictly uphold
106 John Keells Holdings PLC – Sustainability Report 2010/11 the code. A special committee evaluates and validates media An innovative approach to educate Public Health Inspectors was advertisements to ensure compliance with the above guidelines. initiated by Keells Foods. This involved improving the knowledge of Public Health Inspectors on the manufacturing processes and was A periodic review of these activities is expected according to the conducted throughout the island. Initiatives such as this improve the frequency and volume of activity. All companies indicate 100% relationship that the organisation has with the public sector which compliance to this process and is reviewed periodically. To further creates a win-win scenario. strengthen the commitment, business unit Heads submit a statement indicating compliance to this code.
The next step in this initiative is to get companies to report on Non- compliances and incidents regarding this. The code covers the following aspects of Marketing Communication making sure that businesses comply. These can be broadly categorised into the following areas:
• to demonstrate responsibility and good practice in advertising • to enhance overall public confidence in marketing communications • to respect privacy and consumer preferences • to ensure special responsibility as regards marketing communication and children/young people
In addition to this code there are procedures laid down for Marketing Communication implemented through the John Keells Committee on Advertising. The Committee’s mandate is to screen advertising campaigns proposed by group businesses for socially insensitive/unethical/irresponsible advertising using the provisions highlighted in the ICC Code’s General Provisions on Advertising and Communication Practice as a guide.
COMPLIANCE WITH RULES AND REGULATIONS ON GROUP PRODUCTS AND SERVICES All business units have closely monitored whether any fines were imposed on them, as per compliance with rules and regulations on the Group’s products and services setting a zero figure as their target.
Although there are many ways in which product and service excellence can be measured, one key fact is to quantify incidences of not meeting customer expectations in terms of products and services. Being focused on a diverse number of areas requires a close look at the level of service and compliance to regulations.
The overall performance of each company in this regard is measured by mandating the Business Units to divulge occurrences of fines that are significant. The businesses are also required to maintain a list of all fines within a financial year.
The threshold limit of significant fines for a business was set at Rs. 1.0 million and if so required a declaration of the same to the task force. On analysing the performance in the area of significant fines, only one company which represents just over 1% of the overall companies have reported an instance of such, which amounts to a total of Rs. 1.5 million within the reporting period. Although this is a significant achievement, it requires further improvement in terms of reducing the number of fines further to ensure a better class of service to all customers. It is the firm belief of the task force that tracking and reporting these incidences to a wider audience will improve the accountability of a business unit and further enhance its image as a responsible business entity.
John Keells Holdings PLC – Sustainability Report 2010/11 107 PERFORMANCE ON AGENDA 2010/11
Reference Focus Area Agenda for 2010/2011 Status Further comments Page Economic • We will ensure that our operations will safeguard the 45 -47 performance sustainability of the environment and communities we operate in, whilst providing our stakeholders superior returns and services. Environmental • We aim to reinforce the management practices 50-51 Impact currently institutionalized through a process of continuous improvements.
• We will improve on our current energy management 53 Due to the increase in the activity practices and embrace emerging technologies in levels, there hasn’t been a achieving a lower emission rate of green house reduction; however the efficiency gases and a lower carbon foot print. levels have been improved by the introduction of best practices into the business.
• We aim to partner local and international 49-53 Initial discussions have been held environmental conservation agencies to assist with the local Sustainable Energy the group in evaluating cheaper, sustainable and Authority as well as private sector renewable energy sources and related funding for entities on evaluation of sustainable implementation. and renewable energy sources
• We aim to be involved in public policy in relation to climate change and GHG emissions.
• We will progressively move towards converting 51 Currently all Sri Lankan resorts existing facilities where possible to be more energy and city hotels and Chaaya Reef efficient buildings and mandate new developments Ellaidhoo from the Maldivian sector to be governed by globally accepted standards are registered with Green Globe such as LEEDS and Green Globe certifications. certification process out of which Cinnamon Lakeside and Chaaya Reef Ellaidhoo have already obtained certification. Chaaya Bey is currently registered with the USGBC and is aiming to obtain the LEEDS certification or silver level Completed. Continuous process.
108 John Keells Holdings PLC – Sustainability Report 2010/11 Reference Focus Area Agenda for 2010/2011 Status Further comments Page Environmental • We will work towards achieving our goal as a 50-53 Impact contd. group which is recognised as a pioneer in the hotel trade, to be a sustainable entity, setting an example to the community. We will aim to improve our best practices sustainably to comply with as many standards as possible while growing as a successful business within the second quarter of the year 2010.
• Staying in line with the Group’s strategy to operate 52-56 in a more sustainable manner, John Keells Logistics (Pvt) Ltd (JKLL) will embark on back haulage operations to minimise the carbon footprint of its operations. We plan to eliminate approximately 900km per week through back haulage operations, saving approximately 160 liters of fuel per week during the next financial year. Whilst we have already embarked on efficient fleet management practices supported by fleet management technologies, we plan to take forward discussions with our subcontractors and suppliers to develop the required foundation to support JKLL’s migration towards more sustainable practices in logistics.
More than just • With the majority of our development programmes 65-67 a workplace being instructor-led, we aim to offer e-based learning and development opportunities.
• By further reinforcing the learning culture we 65-67 foster at the John Keells Group we will increase the number of hours utilised for training by all our employees in the future.
• We aim to improve the skills of supervisors on 67 feedback giving and subordinates on receiving feedback and so, will increase the number of training session conducted on “Feedback Giving & Receiving”. Ethical • Having worked on institutionalising the Group policy 69-70 business on child labour by developing and disseminating the related guidelines among the management and introducing systematic reporting processes via circulation of questionnaires, these will be verified through a quarterly compliance checklist with effect from 2010/11.
• HR departments will be conducting spot audits to ensure adherence to the Group’s policy on child labour with strict instructions have been given 69-70 to Outlet Managers to adhere to the following requirements pertaining to the employment of young workers as per applicable regulatory requirements, until such time as the said trainees turn 18.
John Keells Holdings PLC – Sustainability Report 2010/11 109 Reference Focus Area Agenda for 2010/2011 Status Further comments Page Ethical • Having worked on institutionalising the Group policy 70 business on forced or compulsory labour by developing and contd. disseminating the related guidelines among the management and introducing systematic reporting processes via circulation of questionnaires, these will be verified through a quarterly compliance checklist with effect from 2010/11.
• With regard to anti-corruption, we will aspire to 71 increase our reach of exposure to our business partners thus establishing a code of business principles and be committed to establishing mutually beneficial relations with our suppliers, customers and business partners.
Health & Safety • We aim to form Safety Committees in all Group 73-75 companies which will be responsible for compliance of the respective companies with the Occupation Health & Safety (OHS) policies formulated.
• The members of Safety Committees will undergo 73-75 training programmes to develop and enhance their skills and knowledge in all aspects of basic OHS.
• We aim to communicate to group companies, the 73-75 importance of conducting basic OHS awareness and prevention programs for staff, their families and the surrounding community and encourage them to conduct same.
• We aim to achieve our final goal which is for all 73-75 As against the last year the Group group companies (other than IT/office industry witnessed a 60% increase in the groups) to obtain the OHSAS 18001 certification number of companies which are by March 2011. OHSAS certified
Our • With the aim of strengthening the sustainability of 77-103 contribution the communities we engage with, we will continue to explore new opportunities to bring together community investment and engagement initiatives which are aligned with the Foundation’s focus areas.
• With regard to English Language Scholarship 82-85 Programme of John Keells Social Responsibility Foundation, we plan to shift our focus and re-introduce a foundation course aimed at schoolchildren aged 12-14 from various parts of the Island and continue to provide education facilities to different age groups of children and youth.
• We will focus on another deserving village in the 92-97 country under the Village Adoption Project, while Cinnamon Lodge and Chaaya Village would continue to support the village of Halmillawe in the future.
110 John Keells Holdings PLC – Sustainability Report 2010/11 Reference Focus Area Agenda for 2010/2011 Status Further comments Page Product We aim to implement a mechanism where the number 105-107 stewardship of fines for group companies will be tracked and investigated on a more regular basis. Through this we plan to present businesses with more opportunities for improvement in products and services and streamline its business processes accordingly.
Completed In Progress Not completed
John Keells Holdings PLC – Sustainability Report 2010/11 111 AGENDA 2011/12
Focus Area Agenda for 2011/2012 Environmental • Aim to achieve Green Globe Certification for all currently operating Sri Lankan City Hotels and Resorts as well as the Impact Maldives Resorts by March 2012. • Aim to achieve LEED Certification for the currently being constructed Chaaya Bey Hotel in Beruwela on completion by March 2013. • Sri Lankan City Hotels and Resorts as well the Maldives Resorts will aim to conduct Energy Audits at each hotel in order to achieve the target of increasing energy efficiency. • The Cinnamon Grand will aim to install a detailed sub-metering system in order to establish department-wise energy targets and achieve the goal of increasing energy efficiency. • Sri Lankan City Hotels and Resorts as well the Maldives Resorts will aim to install energy efficient LED/CFL lighting, Solar panels heaters and Inverter type air conditioners on a replacement basis, as well as Ecogen systems which recover waste heat from air-conditioning units to produce hot water for guest rooms where applicable. • All new retail outlets will be designed to maximise on natural lighting with the installations of skylights / glass panels and conversion of fluorescent light to include electronic ballasts. • Retail Area Managers will aim to conduct internal energy audits for compliance of the initiatives rolled out and establish a reward programme where 20% of the savings achieved is shared amongst the respective staff of the outlet. • Food & Beverage Sector will evaluate the usage of heat recovery of splash steam from the bottling plant to be used for the manufacturing line to reduce the furnace oil consumption in the boilers. • The Group will aim to increase its overall energy efficiency through embracing greener technologies and improved energy management practices. • All Group companies shall monitor emerging issues and keep abreast of regulatory changes, tehnological innovations and stakeholder interests with respect to bio-diversity. • The Group shall carry out and support projects that conserve and raise awareness about the importance of maintaining the integrity of essential ecosystems. • The Group will aim to monitor the impact on biodiversity hot spots due to increase in tourist inflow in resorts located nearby. • The Group will aim to increase quantity of materials recycled and improve its recycling programmes. • The Group will aim to improve the internal energy efficiency targets set by each business unit. More than just • The Group will aim to roll-out the Manager Development programme and the Leadership development programme a workplace (AVP/ VP) which would deliver a total 1,100 on-line training hours in these categories. • For middle management levels the Group will aim to offer a customised programme taking into consideration the expected level of competency and the technical skills required. This would be an 80 hours programme per participant and will be a development item every year in the training calendar. • With respect to capability development the Group will aim to use the E- Learning platform to reach 1,000 Executives and above level employees over a period of 12 months. Ethical • The Group will aim to formulate a child labour remediation policy and deploy it across to its relevant stakeholders. Business Our • The Group will aim to improve its process to collect feedback and analyse impact on community for the various Contribution undergoing projects by the business units.
112 John Keells Holdings PLC – Sustainability Report 2010/11 GRI INDEX
G3 Content Index Assured Global Application Level by Compact
STANDARD DISCLOSURES PART I: Profile Disclosures
1. Strategy and Analysis If applicable, Cross- Reason Profile indicate Description Reported reference/ for Explanation Disclosure the part not Direct answer omission reported Statement from the most senior 1.1 Fully Page 4-5 decision-maker of the organisation. Description of key impacts, risks, 1.2 Fully Page 36 and opportunities. 2. Organisational Profile If applicable, Cross- Reason Profile indicate Description Reported reference/ for Explanation Disclosure the part not Direct answer omission reported 2.1 Name of the organisation. Fully Page 6 Primary brands, products, and/or 2.2 Fully Page 10 services. Operational structure of the organisation, including main 2.3 Fully Page 6 divisions, operating companies, subsidiaries, and joint ventures. Location of organisation’s 2.4 Fully Page 6 headquarters. 2.5 Number of countries where the Fully Page 7-9 organisation operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.
John Keells Holdings PLC – Sustainability Report 2010/11 113 G3 Content Index Assured Global Application Level by Compact If applicable, Cross- Reason Profile indicate Description Reported reference/ for Explanation Disclosure the part not Direct answer omission reported 2.6 Nature of ownership and legal form. Fully Page 6 Markets served (including geographic breakdown, sectors 2.7 Fully Page 10 served, and types of customers/ beneficiaries). 2.8 Scale of the reporting organisation. Fully Page 10 Significant changes during the 2.9 reporting period regarding size, Fully Page 10 structure, or ownership. Awards received in the reporting 2.10 Fully Page 11-12 period. 3. Report Parameters If applicable, Cross- Reason Profile indicate Description Reported reference/ for Explanation Disclosure the part not Direct answer omission reported Reporting period (e.g., fiscal/ 3.1 calendar year) for information Fully Page 28 provided. Date of most recent previous report 3.2 Fully Page 28 (if any). Reporting cycle (annual, biennial, 3.3 Fully Page 28 etc.) Contact point for questions 3.4 Fully Page 28 regarding the report or its contents. 3.5 Process for defining report content. Fully Page 28 Boundary of the report (e.g., countries, divisions, subsidiaries, 3.6 leased facilities, joint ventures, Fully Page 7-9 suppliers). See GRI Boundary Protocol for further guidance. State any specific limitations on the scope or boundary of the report 3.7 Fully Page 28 (see completeness principle for explanation of scope). 3.8 Basis for reporting on joint ventures, Fully Page 28 subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organisations.
114 John Keells Holdings PLC – Sustainability Report 2010/11 G3 Content Index Assured Global Application Level by Compact Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to 3.9 the compilation of the Indicators Fully Page 28 and other information in the report. Explain any decisions not to apply, or to substantially diverge from, the GRI Indicator Protocols. Explanation of the effect of any re- statements of information provided in earlier reports, and the reasons 3.10 for such re-statement (e.g.,mergers/ Fully Page 28 acquisitions, change of base years/periods, nature of business, measurement methods). Significant changes from previous reporting periods in the scope, 3.11 Fully Page 28 boundary, or measurement methods applied in the report. Table identifying the location of the 3.12 Fully Page 113-126 Standard Disclosures in the report. Policy and current practice with 3.13 regard to seeking external assurance Fully Page 128-129 for the report. 4. Governance, Commitments, and Engagement If applicable, Cross- Reason Profile indicate Description Reported reference/ for Explanation Disclosure the part not Direct answer omission reported Governance structure of the organisation, including committees under the highest governance body 4.1 Fully Page 19 responsible for specific tasks, such as setting strategy or organisational oversight. Indicate whether the Chair of the 4.2 highest governance body is also an Fully Page 18 executive officer. For organisations that have a unitary board structure, state the number of 4.3 members of the highest governance Fully Page 17 body that are independent and/or non-executive members. 4.4 Mechanisms for shareholders Fully Page 24-25 and employees to provide recommendations or direction to the highest governance body.
John Keells Holdings PLC – Sustainability Report 2010/11 115 G3 Content Index Assured Global Application Level by Compact 4. Governance, Commitments, and Engagement If applicable, Cross- Reason Profile indicate Description Reported reference/ for Explanation Disclosure the part not Direct answer omission reported Processes in place for the highest 4.6 governance body to ensure conflicts Fully Page 17 of interest are avoided. Process for determining the qualifications and expertise of the members of the highest 4.7 Fully Page 22-23 governance body for guiding the organisation’s strategy on economic, environmental, and social topics. Internally developed statements of mission or values, codes of conduct, and principles relevant to 4.8 Fully Page 16 economic, environmental, and social performance and the status of their implementation. Procedures of the highest governance body for overseeing the organisation’s identification and management of economic, environmental, and social 4.9 Fully Page 20 performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles. Processes for evaluating the highest governance body’s own 4.10 performance, particularly with Fully Page 22-23 respect to economic, environmental, and social performance. Explanation of whether and how the 4.11 precautionary approach or principle Fully Page 29 is addressed by the organisation. Externally developed economic, environmental, and social charters, 4.12 principles, or other initiatives to Fully Page 29 which the organisation subscribes or endorses. 4.13 Memberships in associations (such as industry associations) and/or national/ international advocacy organisations in which the organisation: * Has positions in governance bodies; * Participates in Fully Page 25-27 projects or committees; * Provides substantive funding beyond routine membership dues; or * Views membership as strategic.
116 John Keells Holdings PLC – Sustainability Report 2010/11 G3 Content Index Assured Global Application Level by Compact 4. Governance, Commitments, and Engagement If applicable, Cross- Reason Profile indicate Description Reported reference/ for Explanation Disclosure the part not Direct answer omission reported List of stakeholder groups engaged 4.14 Fully Page 29-30 by the organisation. Basis for identification and selection 4.15 of stakeholders with whom to Fully Page 31-34 engage. Approaches to stakeholder engagement, including frequency 4.16 Fully Page 31 of engagement by type and by stakeholder group. Key topics and concerns that have been raised through stakeholder engagement, and how the 4.17 Fully Page 25 organisation has responded to those key topics and concerns, including through its reporting. STANDARD DISCLOSURES PART II: Disclosures on Management Approach (DMAs) If applicable, Cross- Reason indicate G3 DMA Description Reported reference/ for Explanation the part not Direct answer omission reported Disclosure on Management DMA EC Fully Page 45 Approach EC Economic performance Fully Page 45-47 Not Aspects Market presence Not B+ Report applicable Indirect economic impacts Not Disclosure on Management DMA EN Fully Page 49-50 Approach EN Not Materials Not B+ Report applicable Energy Fully Page 49-53 Not Water Not B+ Report applicable Biodiversity Fully Page 56 Aspects Emissions, effluents and waste Fully Page 54 Not Products and services Not B+ Report applicable Compliance Fully Page 58 Not Transport Not B+ Report applicable Overall
Disclosure on Management DMA LA Fully Page 63 Approach LA
John Keells Holdings PLC – Sustainability Report 2010/11 117 G3 Content Index Assured Global Application Level by Compact STANDARD DISCLOSURES PART II: Disclosures on Management Approach (DMAs) If applicable, Cross- Reason indicate G3 DMA Description Reported reference/ for Explanation the part not Direct answer omission reported Employment Fully Page 63-64 Labour/management relations Fully Page 67 Aspects Occupational health and safety Fully Page 73-75 Training and education Fully Page 65-67 Diversity and equal opportunity Fully Page 70-71 Disclosure on Management DMA HR Fully Page 69-71 Approach HR Investment and procurement Not Not B+ Report practices applicable Non-discrimination Not Freedom of association and Not collective bargaining Aspects Child labour Fully Page 69-70 Forced and compulsory labour Fully Page 70 Not Security practices Not B+ Report applicable Not Indigenous rights Not B+ Report applicable Disclosure on Management DMA SO Fully Page 77-81 Approach SO Community Fully Page 81-103 Corruption Fully Page 71 Not Public policy Not B+ Report applicable Aspects Not Anti-competitive behavior Not B+ Report applicable Not Compliance Not B+ Report applicable Disclosure on Management DMA PR Fully Page 105 Approach PR Not Customer health and safety Not B+ Report applicable Product and service labelling Fully Page 106 Marketing communications Fully Page 106-107 Not Customer privacy Not B+ Report Aspects applicable Compliance Fully Page 107
118 John Keells Holdings PLC – Sustainability Report 2010/11 G3 Content Index Assured Global Application Level by Compact STANDARD DISCLOSURES PART III: Performance Indicators Economic If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Economic performance Direct economic value generated and distributed, including revenues, operating costs, employee EC1 compensation, donations and other Fully Page 45-46 community investments, retained earnings, and payments to capital providers and governments. Financial implications and other risks and opportunities for the Not EC2 Not B+ Report organisation’s activities due to applicable climate change. Coverage of the organisation’s EC3 Fully Page 46-47 defined benefit plan obligations. Significant financial assistance Not EC4 Not B+ Report received from government. applicable Market presence Range of ratios of standard entry level wage compared to local Not EC5 Not B+ Report minimum wage at significant applicable locations of operation. Policy, practices, and proportion of Not EC6 spending on locally-based suppliers Not B+ Report applicable at significant locations of operation. Procedures for local hiring and proportion of senior management Not EC7 Not B+ Report hired from the local community at applicable significant locations of operation. Indirect economic impacts Development and impact of infrastructure investments and EC8 services provided primarily for public Fully Page 81-103 benefit through commercial, in-kind, or pro bono engagement. EC9 Understanding and describing Not Not B+ Report significant indirect economic applicable impacts, including the extent of impacts.
John Keells Holdings PLC – Sustainability Report 2010/11 119 G3 Content Index Assured Global Application Level by Compact Environmental If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Materials Not EN1 Materials used by weight or volume. Not B+ Report applicable Percentage of materials used that Not EN2 Not B+ Report are recycled input materials. applicable Energy Direct energy consumption by EN3 Fully Page 52-53 8 primary energy source. Indirect energy consumption by EN4 Fully Page 52-53 8 primary source. Energy saved due to conservation Not EN5 Not B+ Report and efficiency improvements. applicable Initiatives to provide energy-efficient or renewable energy based products Not EN6 and services, and reductions in Not B+ Report applicable energy requirements as a result of these initiatives. Initiatives to reduce indirect energy Not EN7 consumption and reductions Not B+ Report applicable achieved. Water Not EN8 Total water withdrawal by source. Not B+ Report applicable Water sources significantly affected Not EN9 Not B+ Report by withdrawal of water. applicable Percentage and total volume of Not EN10 Not B+ Report water recycled and reused. applicable Biodiversity Location and size of land owned, leased, managed in, or adjacent to, EN11 protected areas and areas of high Fully Page 60 8 biodiversity value outside protected areas. Description of significant impacts of activities, products, and services Not EN12 on biodiversity in protected areas Not B+ Report applicable and areas of high biodiversity value outside protected areas. Not EN13 Habitats protected or restored. Not B+ Report applicable EN14 Strategies, current actions, and Not Not B+ Report future plans for managing impacts applicable on biodiversity.
120 John Keells Holdings PLC – Sustainability Report 2010/11 G3 Content Index Assured Global Application Level by Compact If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Number of IUCN Red List species and national conservation list Not EN15 species with habitats in areas Not B+ Report applicable affected by operations, by level of extinction risk. Emissions, effluents and waste Total direct and indirect greenhouse EN16 Fully Page 54-56 8 gas emissions by weight. Other relevant indirect greenhouse Not EN17 Not B+ Report 8 gas emissions by weight. applicable Initiatives to reduce greenhouse gas Not EN18 Not B+ Report emissions and reductions achieved. applicable Emissions of ozone-depleting Not EN19 Not B+ Report substances by weight. applicable NOx, SOx, and other significant air Not EN20 Not B+ Report emissions by type and weight. applicable Total water discharge by quality and Not EN21 Not B+ Report destination. applicable Total weight of waste by type and Not EN22 Not B+ Report disposal method. applicable Total number and volume of Not EN23 Not B+ Report significant spills. applicable Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Not EN24 Not B+ Report Basel Convention Annex I, II, III, and applicable VIII, and percentage of transported waste shipped internationally. Identity, size, protected status, and biodiversity value of water bodies and related habitats Not EN25 Not B+ Report significantly affected by the reporting applicable organization’s discharges of water and runoff. Products and services Initiatives to mitigate environmental Not EN26 impacts of products and services, Not B+ Report applicable and extent of impact mitigation. Percentage of products sold and Not EN27 their packaging materials that are Not B+ Report applicable reclaimed by category. Compliance EN28 Monetary value of significant fines Fully Page 58 and total number of non-monetary sanctions for non-compliance with 8 environmental laws and regulations.
John Keells Holdings PLC – Sustainability Report 2010/11 121 G3 Content Index Assured Global Application Level by Compact If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Transport Significant environmental impacts of transporting products and other goods and materials used Not EN29 Not B+ Report for the organisation’s operations, applicable and transporting members of the workforce. Overall Total environmental protection Not EN30 expenditures and investments by Not B+ Report applicable type. Social: Labour Practices and Decent Work If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Employment Total workforce by employment type, LA1 Fully Page 63-64 employment contract, and region. Total number and rate of employee LA2 turnover by age group, gender, and Fully Page 64-65 6 region. Benefits provided to full-time employees that are not provided to Not LA3 Not B+ Report temporary or part-time employees, applicable by major operations. Labour/management relations Percentage of employees covered LA4 Fully Page 67 1 3 by collective bargaining agreements. Minimum notice period(s) regarding significant operational changes, Not LA5 Not B+ Report including whether it is specified in applicable collective agreements. Occupational health and safety Percentage of total workforce represented in formal joint management-worker health and Not LA6 Not B+ Report safety committees that help monitor applicable and advise on occupational health and safety programmes.
LA7 Rates of injury, occupational Fully Page 74 1 diseases, lost days, and absenteeism, and number of work- related fatalities by region.
122 John Keells Holdings PLC – Sustainability Report 2010/11 G3 Content Index Assured Global Application Level by Compact If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Education, training, counseling, prevention, and risk-control programmes in place to assist LA8 Fully Page 74-75 1 workforce members, their families, or community members regarding serious diseases. Health and safety topics covered Not LA9 in formal agreements with trade Not B+ Report applicable unions. Training and education Average hours of training per year LA10 Fully Page 65-67 per employee by employee category. Programmes for skills management and lifelong learning that support Not LA11 the continued employability of Not B+ Report applicable employees and assist them in managing career endings. Percentage of employees receiving LA12 regular performance and career Fully Page 67 development reviews. Diversity and equal opportunity Composition of governance bodies and breakdown of employees per Not LA13 category according to gender, age Not B+ Report applicable group, minority group membership, and other indicators of diversity. Ratio of basic salary of men to Not LA14 Not B+ Report women by employee category. applicable Social: Human Rights If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Diversity and equal opportunity Percentage and total number of significant investment agreements Not HR1 that include human rights clauses or Not B+ Report applicable that have undergone human rights screening. Percentage of significant suppliers and contractors that have Not HR2 Not B+ Report undergone screening on human applicable rights and actions taken. Total hours of employee training on policies and procedures concerning Not HR3 aspects of human rights that are Not B+ Report applicable relevant to operations, including the percentage of employees trained.
John Keells Holdings PLC – Sustainability Report 2010/11 123 G3 Content Index Assured Global Application Level by Compact If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Non-discrimination Total number of incidents of Not HR4 Not B+ Report discrimination and actions taken. applicable Freedom of association and collective bargaining Operations identified in which the right to exercise freedom of association and collective bargaining Not HR5 Not B+ Report may be at significant risk, and applicable actions taken to support these rights. Child labour Operations identified as having significant risk for incidents of child 1 2 HR6 labour, and measures taken to Fully Page 69-70 contribute to the elimination of child 5 labour. Forced and compulsory labour Operations identified as having significant risk for incidents of forced 1 2 HR7 or compulsory labour, and measures Fully Page 70-71 to contribute to the elimination of 4 forced or compulsory labour. Security practices Percentage of security personnel trained in the organisation’s policies Not HR8 or procedures concerning aspects Not B+ Report applicable of human rights that are relevant to operations. Indigenous rights Total number of incidents of violations involving rights of Not HR9 Not B+ Report indigenous people and actions applicable taken. Social: Society If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Community Nature, scope, and effectiveness of any programmes and practices that assess and manage the impacts of operations on communities, SO1 including entering, operating, and Fully Page 77-103 exiting.
124 John Keells Holdings PLC – Sustainability Report 2010/11 G3 Content Index Assured Global Application Level by Compact If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Corruption Percentage and total number of SO2 business units analyzed for risks Fully Page 71 10 related to corruption. Percentage of employees trained Not SO3 in organization’s anti-corruption Not B+ Report applicable policies and procedures. Actions taken in response to Not SO4 Not B+ Report incidents of corruption. applicable Public policy Public policy positions and Not SO5 participation in public policy Not B+ Report applicable development and lobbying. Total value of financial and in-kind contributions to political parties, Not SO6 Not B+ Report politicians, and related institutions by applicable country. Anti-competitive behaviour Total number of legal actions for anti-competitive behavior, anti-trust, Not SO7 Not B+ Report and monopoly practices and their applicable outcomes. Compliance Monetary value of significant fines and total number of non-monetary Not SO8 Not B+ Report sanctions for non-compliance with applicable laws and regulations. Social: Product Responsibility If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Customer health and safety Life cycle stages in which health and safety impacts of products and services are assessed for Not PR1 improvement, and percentage of Not B+ Report applicable significant products and services categories subject to such procedures. Total number of incidents of non- Not Not B+ Report compliance with regulations and applicable voluntary codes concerning health PR2 and safety impacts of products and services during their life cycle, by type of outcomes.
John Keells Holdings PLC – Sustainability Report 2010/11 125 G3 Content Index Assured Global Application Level by Compact If applicable, Perfor- Cross- Reason indicate mance Description Reported reference/ for Explanation the part not Indicator Direct answer Omission reported Product and service labelling Type of product and service information required by procedures, PR3 and percentage of significant Fully Page 105-106 8 products and services subject to such information requirements. Total number of incidents of non- compliance with regulations and Not PR4 voluntary codes concerning product Not B+ Report applicable and service information and labeling, by type of outcomes. Practices related to customer satisfaction, including results of Not PR5 Not B+ Report surveys measuring customer applicable satisfaction. Marketing communications Programmes for adherence to laws, standards, and voluntary codes related to marketing PR6 Fully Page 106-107 communications, including advertising, promotion, and sponsorship. Total number of incidents of non-compliance with regulations and voluntary codes concerning Not PR7 Not B+ Report marketing communications, applicable including advertising, promotion, and sponsorship by type of outcomes. Customer privacy Total number of substantiated complaints regarding breaches of Not PR8 Not B+ Report customer privacy and losses of applicable customer data. Compliance Monetary value of significant fines for non-compliance with laws and PR9 Fully Page 107 regulations concerning the provision and use of products and services.
126 John Keells Holdings PLC – Sustainability Report 2010/11 John Keells Holdings PLC – Sustainability Report 2010/11 127 ASSURANCE STATEMENT
INTRODUCTION • The boundary of the report covers 76 companies under John Det Norske Veritas AS (DNV) has been commissioned by the Keells Holdings PLC, based on management control and /or management of John Keells Holdings PLC (JKH) to carry out an significant influence as explained in the Report; assurance engagement on the Company’s 2010 -11 Sustainability • The work was performed at Report (the Report) in its printed format against the Global Reporting • JKH Head office and Sectoral Head Offices at Colombo Initiative (GRI) 2006 Sustainability Reporting Guidelines Version • Manufacturing facility, M/s Chemical Industries (Colombo) 3.0 (G3) and AccountAbility’s AA1000 Assurance Standard 2008 PLC at Colombo (AA1000AS 2008). • JKH Warehouse Logistic Facility at Colombo outskirt • DNV carried out the verification during April 2011; JKH is responsible for the collection, analysis, aggregation and • The report was checked for meeting the requirements of GRI presentation of information within the Report. Our responsibility Application Level ‘B’. in performing this work is to the management of JKH only and in accordance with terms of reference agreed with the Company. The VERIFICATION METHODOLOGY assurance engagement is based on the assumption that the data Our assurance engagement was planned and carried out in and information provided to us is complete and true. This statement accordance with the DNV Protocol for Verification of Sustainability is intended for the management and stakeholders of JKH. Reporting, which draws on the GRI G3 and AA1000AS 2008. As part of the verification DNV has challenged the sustainability-related Scope of Assurance statements and claims made in the Report and assessed the The scope of work agreed upon with JKH included the following: robustness of the underlying data management system, information • Verification of the entire Report covering social, environmental flow and controls. We have: and economic indicators for the period 1st April 2010 to 31st • Examined and reviewed documents, data and other information March 2011; made available to DNV by JKH; • Verification in accordance with the requirements for a Type 2 • Visited the Head-Office and Sectoral Head Offices as well as and Moderate Level engagement, and evaluation of specified the manufacturing facility (CIC) and Warehouse at Colombo for sustainability performance information in accordance with the the purpose of verifying qualitative and quantitative information requirements of AA1000AS (2008) detailed below: presented in this Report; • Information relating to company’s sustainability • Conducted interviews with Senior Management at JKH’s Head issues, responses, performance data, case studies Office and eight (8) of the Sectoral Head Offices, including data and underlying systems for the management of such owners , decision-makers and risk managers from different information and data; divisions and functions of the Company; • Information relating to company’s materiality assessment • Performed sample-based reviews of the mechanisms for and stakeholder engagement processes; implementing the Company’s own sustainability-related policies, as described in the Report, and for determining material issues to be included in the Report;
128 John Keells Holdings PLC – Sustainability Report 2010/11 • Performed sample-based checks of the processes for • A structured approach to evaluate and monitor the sustainability generating, gathering and managing the quantitative and risks in the supply chain and outsourced activities of the qualitative data included in the Report; company in its Sri Lanka and overseas operations will help • Reviewed the process of acquiring information and economic in mitigating risks (if any) related to labour and human rights data from the financial data presented in the 2010-11 certified issues. annual report. • To further enhance the quality and reliability of the performance CONCLUSIONS data, an internal benchmarking of best practices could ensure In DNV’s opinion, the Report is a fair representation of the knowledge sharing among data-owners and decision-makers Company’s sustainability-related strategies, management systems and improve the consistency of data aggregation system; and performance. The Report meets the general content and quality requirements of the GRI G3, and DNV confirms that the GRI • In view of Sri Lanka’s currently stable socio-political scenario, requirements for Application Level ‘B+’ have been met. We have the company has surpassed its performance in business evaluated the Report’s adherence to the following principles on a sectors like Leisure , Hotel and Resorts ; It would be worthwhile scale of ‘Good’, ‘Acceptable’ and ‘Needs Improvement’: if JKH reinforces its environmental footprint in assessing and mitigating the impact on bio-diversity ( if any) due to increase in AA1000AS (2008) PRINCIPLES tourist inflow in company-owned properties; Inclusivity: Acceptable . The Company had engaged themselves in dialogue with selected stakeholders during the year through different • The boundary of the Report may be progressively expanded to channels. The material issues emerging from the stakeholder include its business partners and suppliers over which JKH has engagement were collected, prioritised and the results are reflected influence, in order to provide a more complete report. in the report. Reference is made to the issue-based stakeholder engagement process which shall require / may need a re-visit in DNV’S COMPETENCE AND INDEPENDENCE context to addressing the inclusiveness of its major stakeholder DNV provides sustainability risk management services through base, Supply Chain Partners . qualified specialists worldwide. DNV was not involved in the Materiality: Acceptable. The process developed internally captures preparation of any statements or data included in the Report except key sustainability issues. The completeness of materiality assessment for this Assurance Statement. DNV did not provide any services to process at both sectoral and group levels may need to be focused JKH during 2010-11 that could conflict with the independence of further to bring out sustainability issues with short, medium and long our work. DNV expressly disclaims any liability or co-responsibility for term impacts., any decision a person or entity would make based on this Assurance Responsiveness: Acceptable. The Company has adequately Statement. responded to stakeholder concerns through its policies and management systems, and this is reflected in the Report. For Det Norske Veritas AS, Reliability: Acceptable. We have evaluated the reliability of specified sustainability performance information and found it to be acceptable. The Company has developed its own data management system for capturing and reporting its sustainability performance. Although no systematic errors have been detected, DNV has identified some Prasun Kundu manual discrepancies which have subsequently been corrected. Lead Verifier Det Norske Veritas AS ADDITIONAL PRINCIPLES Completeness: Acceptable. The Report covers 22 core performance indicators required for the GRI G3 Level ‘B’ and that are material within the Company’s reporting boundary. The Report gives a detailed description of the limitations in scope and boundary. The Company may consider increasing the scope and boundary to bring in business partners and suppliers who are significant, considering Antonio Astone the nature of JKH’s business. Reviewer Neutrality: Good. The Company has reported sustainability related Global Manager, Corporate Responsibility Services issues in a balanced manner, in terms of content and tone. Det Norske Veritas AS Challenges and limitations are presented together with commitments to future improvements. 12th May 2011, Kolkata, India
OPPORTUNITIES FOR IMPROVEMENT The following is an excerpt from the observations and opportunities reported back to the management of JKH. However, these do not affect our conclusions on the Report, and they are indeed generally consistent with the management objectives already in place.
John Keells Holdings PLC – Sustainability Report 2010/11 129 ANNEX 1 – ECONOMIC VALUE STATEMENT
Consumer Financial Information Eliminations/ Transportation Leisure Property Others Total Group Total Rs. Millions Foods & Retail Services Technology Adjustments For the year ended 31 March 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 % 2010 %
Direct economic value generated Revenue 13,775 9,785 15,294 12,539 2,707 1,821 18,868 16,318 6,589 5,332 3,336 1,599 3,341 3,348 63,910 50,742 (3,410) (2,762) 60,500 86.69 47,980 86.29 Interest income 72 69 488 292 29 36 10 14 1,712 1,590 6 12 775 1,231 3,092 3,244 (344) (297) 2,748 3.94 2,947 5.30 Dividend income 5 14 263 250 81 49 - - 17 4 - - 3,571 3,598 3,937 3,915 (3,874) (3,871) 63 0.09 44 0.08 Share of results of associates 2,140 2,158 ------607 413 (23) (13) (83) (2) 2,641 2,556 - - 2,641 3.78 2,556 4.60 Profit on sale of assets & other income 220 94 136 342 56 26 380 298 633 314 50 18 2,423 939 3,898 2,031 (531) 44 3,367 4.82 2,075 3.73 Valuation gain on IP - - 230 - 1,126 ------23 - 1,379 - (911) - 468 0.67 - - 16,212 12,120 16,411 13,423 3,999 1,932 19,258 16,630 9,558 7,653 3,369 1,616 10,050 9,114 78,857 62,488 (9,070) (6,886) 69,787 100.00 55,602 100.00
Economic value distributed Operating costs 12,509 9,116 8,526 7,393 1,750 1,282 15,490 13,256 6,828 5,488 3,008 1,067 2,310 2,235 50,421 39,837 (2,915) (2,510) 47,506 68.07 37,327 67.13 Employee wages & benefits 509 416 2,266 2,066 140 127 1,891 1,740 921 740 513 464 633 585 6,873 6,138 - - 6,873 9.85 6,138 11.04 Payments to providers of funds 157 135 1,734 1,654 315 465 238 285 578 52 10 121 2,708 3,053 5,740 5,765 (2,258) (2,200) 3,482 4.99 3,565 6.41 Payments to government 194 115 837 791 67 53 1,149 917 558 627 127 60 262 343 3,194 2,906 - - 3,194 4.58 2,906 5.23 Community investments 2 (4) 9 6 1 - 7 5 2 1 1 2 24 20 46 30 - - 46 0.07 30 0.05 13,371 9,778 13,372 11,910 2,273 1,927 18,775 16,203 8,887 6,908 3,659 1,714 5,937 6,236 66,274 54,676 (5,173) (4,710) 61,101 87.55 49,966 89.86
Economic value retained Depreciation 124 107 838 912 10 10 440 381 116 88 39 47 133 192 1,700 1,737 - - 1,700 2.44 1,737 3.12 Amortisation 14 14 374 149 - - - 163 187 187 21 5 13 7 609 525 - 16 609 0.87 541 0.97 Profit after dividends 2,703 2,222 1,827 451 1,716 (4) 43 (118) 368 469 (350) (150) 3,967 2,677 10,274 5,547 (3,897) (2,189) 6,377 9.14 3,358 6.04 Retained for reinvestment / growth 2,841 2,343 3,039 1,512 1,726 6 483 426 671 744 (290) (98) 4,113 2,876 12,583 7,809 (3,897) (2,173) 8,686 12.45 5,636 10.14
130 John Keells Holdings PLC – Sustainability Report 2010/11 Consumer Financial Information Eliminations/ Transportation Leisure Property Others Total Group Total Rs. Millions Foods & Retail Services Technology Adjustments For the year ended 31 March 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 % 2010 %
Direct economic value generated Revenue 13,775 9,785 15,294 12,539 2,707 1,821 18,868 16,318 6,589 5,332 3,336 1,599 3,341 3,348 63,910 50,742 (3,410) (2,762) 60,500 86.69 47,980 86.29 Interest income 72 69 488 292 29 36 10 14 1,712 1,590 6 12 775 1,231 3,092 3,244 (344) (297) 2,748 3.94 2,947 5.30 Dividend income 5 14 263 250 81 49 - - 17 4 - - 3,571 3,598 3,937 3,915 (3,874) (3,871) 63 0.09 44 0.08 Share of results of associates 2,140 2,158 ------607 413 (23) (13) (83) (2) 2,641 2,556 - - 2,641 3.78 2,556 4.60 Profit on sale of assets & other income 220 94 136 342 56 26 380 298 633 314 50 18 2,423 939 3,898 2,031 (531) 44 3,367 4.82 2,075 3.73 Valuation gain on IP - - 230 - 1,126 ------23 - 1,379 - (911) - 468 0.67 - - 16,212 12,120 16,411 13,423 3,999 1,932 19,258 16,630 9,558 7,653 3,369 1,616 10,050 9,114 78,857 62,488 (9,070) (6,886) 69,787 100.00 55,602 100.00
Economic value distributed Operating costs 12,509 9,116 8,526 7,393 1,750 1,282 15,490 13,256 6,828 5,488 3,008 1,067 2,310 2,235 50,421 39,837 (2,915) (2,510) 47,506 68.07 37,327 67.13 Employee wages & benefits 509 416 2,266 2,066 140 127 1,891 1,740 921 740 513 464 633 585 6,873 6,138 - - 6,873 9.85 6,138 11.04 Payments to providers of funds 157 135 1,734 1,654 315 465 238 285 578 52 10 121 2,708 3,053 5,740 5,765 (2,258) (2,200) 3,482 4.99 3,565 6.41 Payments to government 194 115 837 791 67 53 1,149 917 558 627 127 60 262 343 3,194 2,906 - - 3,194 4.58 2,906 5.23 Community investments 2 (4) 9 6 1 - 7 5 2 1 1 2 24 20 46 30 - - 46 0.07 30 0.05 13,371 9,778 13,372 11,910 2,273 1,927 18,775 16,203 8,887 6,908 3,659 1,714 5,937 6,236 66,274 54,676 (5,173) (4,710) 61,101 87.55 49,966 89.86
Economic value retained Depreciation 124 107 838 912 10 10 440 381 116 88 39 47 133 192 1,700 1,737 - - 1,700 2.44 1,737 3.12 Amortisation 14 14 374 149 - - - 163 187 187 21 5 13 7 609 525 - 16 609 0.87 541 0.97 Profit after dividends 2,703 2,222 1,827 451 1,716 (4) 43 (118) 368 469 (350) (150) 3,967 2,677 10,274 5,547 (3,897) (2,189) 6,377 9.14 3,358 6.04 Retained for reinvestment / growth 2,841 2,343 3,039 1,512 1,726 6 483 426 671 744 (290) (98) 4,113 2,876 12,583 7,809 (3,897) (2,173) 8,686 12.45 5,636 10.14
John Keells Holdings PLC – Sustainability Report 2010/11 131 ANNEX 2
In addition, many companies of the John Keells Group engaged were donated to the Chitra Lane organisation, a government in education-related initiatives as part of their community service approved charity under the purview of the welfare society of activities, including the following: children; hosted 40 kids from Little Enquirer of the Daily Mirror • Ceylon Cold Stores donated sports kits and nutritional food, at Nuga Gama for World Children’s Day. held coaching camps and provided accident insurance • Cinnamon Lodge organised a programme to celebrate World cover for the benefit of athletes of Hanwella Central College Children’s Day for the benefit of 50 students of Palugaswewa; numbering 20 persons. repaired the air-conditioners of the Palugaswewa School • Chaaya Blu donated books to pre-school children in Computer Centre; donated 100 exercise books to students of Trincomalee and Sampaltivu benefiting respectively 100 and Hiriwadunna school; facilitated a visit by teachers and students of 500 economically disadvantaged students; donated lunch Ibbagamuwa Education Zone benefiting 35 persons; organised packets to children from the Ratmalana School for the Deaf a geographical quiz contest for students to commemorate and Blind during their educational tour of Trincomalee. World Tourism Day; donated school requirements to children • Chaaya Citadel organised a programme on table etiquette for to commence schooling at Meegaswewa School, which was 30 school children. previously closed due to insufficient students. • Chaaya Island Dhonweli organised an educational tour of the • John Keells Logistics Limited together with the Peliyagoda hotel for grade 10 students of Huraa school, benefiting 24 Municipal Council donated over 11,000 exercise books students and 4 teachers; organised a pastry demonstration for amongst school children from low income families in the area in children which concentrated on cake decoration. the presence of children, parents and distinguished guest from • Chaaya Lagoon Hakuraa Huraa painted a school in Kolhufushi, the area. This event was sponsored by John Keells Logistics benefiting 15 students; trained 10 technicians with the help of for the fourth successive year. the General Manager and Engineer of the resort; organised • Tea Smallholder Factories PLC held a one-day educational an educational programme during World Environment Week, programme on the Tea industry and its processes, which benefiting approximately 200 people. included a tour of the Karawita tea factory for 68 Agriculture • Chaaya Reef Ellaidhoo organised a programme on hotel students of the Eastern University; donated Rs. 15,000- via operations for 30 Hannameedhoo students by the management the welfare society of Karawita Tea Factory to the Karawita team of the hotel. Junior school for an extension of a building. The extension • Chaaya Village held an art competition at the hotel among meant the construction of new classrooms which impacted schoolchildren of Hiriwadunna junior school to commemorate 200 students of the village. The company also concluded its World Children’s day. project to sponsor 50% of the electricity bill payments for the • Cinnamon Grand hosted 65 children from the Kinder Care computer lab of Bengamuwa Maha Vidyalaya which continued House of Children and over 80 children from Sujatha Vidyalaya for a period of six months commencing September 2009 and to traditional activities at Nuga Gama and enjoyed traditional ending May 2010; sponsored the transportation costs of Meth New Year sweet meats; entertained the boys of the Don Mihira children’s day trip. Bosco’s Children’s Home during the Christmas Season for a day of fun and games for the fifth successive year; hosted a team of students from Ladies’ College as part of their culinary and cookery tutelage where the team participated in a culinary experience at London Grill; donated dry rations to Vajira Sri Children’s Home – infant section; hosted the ‘Hot, Hot, Hot!’ show, the third collaboration with Koluu, proceeds of which
132 John Keells Holdings PLC – Sustainability Report 2010/11 ANNEX 3
In addition, many companies of the John Keells Group engaged in • Tea Smallholder Factories conducted a health camp where health-related initiatives as part of their community service activities, a general physical examination took place to screen non- including the following: communicable diseases with the participation of the MOH and • Chaaya Citadel donated Rs. 126,900/- to the Kandy Kydney PHI, for the benefit of 60 persons. At the same time, 76 persons Protection Society, benefiting 120 persons; conducted HIV/ in Karawita were provided with the AH1N1 vaccination. The AIDS awareness sessions at the Sri Lanka Air Force base in Broadlands Tea Factory conducted a Health Camp where a Diyathalawa, benefiting 725 persons. general physical examination as well as dental examination • Chaaya Island Dhonweli organised a lecture with the assistance took place with the participation of 2 General Physicians and of a group of Australian doctors (who were guests at the resort) a Dentist from the Nawalapitiya Hospital, for the benefit of for all local hospital doctors at Hulu Male Hospital on general 295 persons. Similarly, the Hingalgoda Tea Factory and the awareness which also included a Q&A session; organised Kurupanawa Tea Factory conducted Health Camps which a blood donation camp with the National Blood Transfusion benefited 467 and 555 persons, respectively. Services where over 45 members of staff participated to fulfill the urgent requirement of blood at the Blood Bank of Maldives; organised an HIV/AIDS Awareness programme in collaboration with the Centre for Community Health and Disease Control and SHE – an NGO in the area -benefiting over 120 resort associates and their families. • Cinnamon Grand hosted the World Breast Cancer Awareness Day conference with the participation of the first lady Mrs. Shiranthi Rajapakse and also designed and launched the Breast Cancer Awareness Book in collaboration with the National Cancer Control Programme; sponsored the Sri Lanka Ostomy Conference event with a press conference and tea, where the Minister of Health, leading consultants, and members of the Lions Club as well as patients were present; was the hospitality partner for the Alzheimer Day walk, where breakfast for all the participants was sponsored by the hotel and the walk started off from the hotel premises; launched the Diabetic Menu on World Diabetes Day, in response to growing concerns about the escalating health threat that diabetes poses. • Cinnamon Lakeside cleaned the area between the hotel fence and the lake as a dengue prevention measure. • Cinnamon Lodge provided snacks and tea for a blood donation campaign for the villagers of Habarana. The HIV/ AIDS Committee of Cinnamon Lodge collaborated with the Foundation’s HIV/AIDS Awareness Campaign by holding several community outreach programmes. • Chaaya Village painted the Horiwila Native hospital as part of the reconstruction work being carried out at the hospital; organised an HIV/AIDS Awareness programme at the hotel to benefit its employees.
John Keells Holdings PLC – Sustainability Report 2010/11 133 ANNEX 4
Engaging employees and communities in protecting the environment has been one of the John Keells Group’s most keenly-supported volunteering activities. Many of the companies of the Group engaged in environment related initiatives as part of their community service activities, including the following:
• Ceylon Cold Stores engaged in cleaning and maintenance of the banks of Depa Ela canal and landscaping and maintenance of trees planted in 2008 in Mahawela located on the Ranala Habarakada road; constructed 2 toilets and 16 masonry structures for trees at the Kanneliya forest reserve; planted 25 Kabaranga trees (recommended by the Road Development Authority) in the Nawagamuwa area. • Chaaya Blu rehabilitated a polluted water pond that benefited 300 residents of Sampaltivu. • Chaaya Island Dhonweli carried out a tree planting campaign and an Island cleaning campaign with the participation of guests and staff to celebrate World Tourism Week. • Chaaya Lagoon Hakuraa Huraa rehabilitated the lagoon during World Tourism Week, impacting 65 people directly and indirectly; created a new island which benefited 15 persons. • Chaaya Village carried out rehabilitation work in the Habarana Lake by the removal of debris accumulated. • Cinnamon Grand planted a sapling on World Environment Day, with the participation of Bollywood star Vivek Oberoi, and IIFA dignitaries. • Cinnamon Lakeside was involved in the tree planting campaign to commemorate World Environment Day. • Cinnamon Lodge planted 100 trees to commemorate the World Environment Day; participated in the rehabilitation activities of the Habarana Lake.
134 John Keells Holdings PLC – Sustainability Report 2010/11 ANNEX 5
In addition, many of the John Keells Group companies engaged in • Tea Smallholder Factories donated roofing sheets worth Rs. community service activities, including the following: 32,000/- for the reconstruction of a praja shala (community • Ceylon Cold Stores has commenced developing the village centre) in Batuwangala. of Mangalagama in the Ampara District as a cashew planting • Yala Village constructed new sanitary facilities for the benefit of village and funded the cashew farmers in collaboration with 50 safari jeep drivers. Commercial Bank. This will help increase the income of farmers since the processing is also proposed to be done in the village. • Chaaya Blu organized a dansala at the Koneswaram Temple on Vesak day, which benefited 500 pilgrims. • Chaaya Lagoon Hakuraa Huraa – Atoll office maintenance project • Chaaya Reef Ellaidhoo donated organic fertilizer bags produced by the resort to 25 families. • Chaaya Village carried out a one-day programme at the Dambulla Elders' Home where staff was involved in engaging with the elders and donating food worth Rs. 25,000/-. • Cinnamon Grand was the hospitality partner for the Shilpa Arts Festival where children displaced by the Tsunami displayed their talents through works of art; in association with The Animal Welfare Association of Sri Lanka hosted the annual awareness raising campaign cum press conference for the second consecutive year, to mitigate animal cruelty and garner support towards this cause. The event was attended by Sri Lanka’s leading animal activists, and the first lady Shiranthi Rajapakse; made a monthly donation of dry rations to the Dias Home for the Aged in Wellampitiya throughout the year; donated 75 packs of rice and curry to the Salvation Army for Christmas; donated snacks and drinks to bolster the spirits of 96 abused girls and women in Borella. • Cinnamon Lakeside donated dry rations worth of Rs. 7,000/- to Sunanda Foundation; organized a Christmas party for autistic children; Accounts staff visited the Granville Memorial Children’s Development Centre at Kelaniya where they shared their time and donated some gifts; HR team donated 3 ceiling fans and school requirements to the Methsarana Children’s Rehabilitation home and held a tea party for them; repaired and painted the children’s play equipment at the De Mel Park. • Cinnamon Lodge launched the Detha Saviya farm project; donated discarded linen items to an Elder's Home in Dambulla and to the Jaffna Army Camp; donated used cutlery, crockery and furniture to the Habarana Police Station.
John Keells Holdings PLC – Sustainability Report 2010/11 135 ANNEX 6
DISASTER RELIEF AND PHILANTHROPIC INITIATIVES In addition, many of the John Keells Group companies engaged in disaster relief activities, including the following: • Chaaya Blu constructed a house for a tsunami-affected family of five in Nilaweli; provided flood relief items to those affected in Trincomalee and Sampaltivu, benefiting 75 and 12 persons respectively. • Cinnamon Grand donated funds to the Cancer Foundation to help in the construction of a transit home for cancer patients and their relatives who have to visit the Cancer Hospital in Maharagama • Cinnamon Lakeside donated 10 elbow crutches to war heroes at Ranaviru Sevana (a welfare society for Sri Lankan Army personnel) to commemorate War Hereos Week, with a view to assist their rehabilitation; donated water bottles and dry rations to Gangarama Collection Centre for flood relief; prepared food for distribution in flood affected areas via the Ratmalana Air Force base; painted the shrine room, dining room and accommodation area of the YMBA Elder’s Home in Colombo 2; donated items of crockery and cutlery to the Regimental Headquarters of Gemunu Watch at Kuruwita to be used by disabled soldiers. • Habarana Lodge donated meals worth Rs. 17,000/- as disaster relief for those at the Habarana Relief Camp; donated drinking water to those affected in Sooriyagama; donated milk powder worth Rs. 10,000/- to those in Welikanda Camp.
136 John Keells Holdings PLC – Sustainability Report 2010/11 The cover of this report was made with the seaweeds from the Venice Lagoons & Forest Stewardship Counsel (FSC) Certified Fibres. The type of power used to manufacture this cover is Energia Pura, which is electrical energy covered by Renewable Energy Certificate Systems (RECS) Certificates. JOHN KEELLS HOLDINGS PLC – SUSTAINABILITY 2010/11 REPORT THE INSIDE STORY
JOHN KEELLS HOLDINGS PLC www.keells.com Sustainability Report 2010/11